Despite Cisco reporting a $10.3 billion profit last year, the company announced layoffs of 5,500 workers, citing a need to invest in artificial intelligence, alongside other tech companies that are restructuring their workforce for similar reasons.
CEO Chuck Robbins referenced 'AI' multiple times while explaining the layoffs, emphasizing the company's commitment to staying competitive in the 'ongoing AI race,' a reflection of a broader trend among tech giants.
The layoffs have positively impacted Cisco's stock price, rising significantly after the announcement. This trend occurs across tech companies, indicating layoffs often bolster short-term investor confidence.
Experts are skeptical about the motivations behind the layoffs, suggesting that while AI is publicly discussed, the reality may often be rooted in traditional economic dynamics like outsourcing or cost-cutting measures.
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