Cisco is set to reduce its workforce by thousands in a second round of layoffs this year as the US networking equipment manufacturer refocuses on higher-growth sectors such as cybersecurity and AI, according to sources knowledgeable on the matter. The number of affected employees could match or slightly exceed the 4,000 laid off in February, and might be disclosed as early as Wednesday alongside the company's fourth-quarter financial results, stated the sources, who were not authorized to speak publicly. Reuters had exclusively reported on the job cuts at San Jose, California-based Cisco in February, before the company made its announcement. As of July 2023, Cisco employed approximately 84,900 people, as per its annual report, excluding the February layoffs. Cisco has yet to respond to a request for comment. Following the initial Reuters report on the cuts, the company's shares dropped by nearly one percent, with the stock falling over nine percent year-to-date as of Thursday's close. Facing slow demand and supply chain issues in its core business, Cisco has been driven to diversify, notably through its $28-billion acquisition of cybersecurity firm Splunk, finalized in March. This acquisition aims to enhance its subscription services and lessen dependence on one-time equipment sales. Cisco has also been integrating AI into its product lineup and reaffirmed in May its goal of securing $1 billion in AI product orders by 2025. In June, the company established a $1-billion fund to invest in AI startups like Cohere, Mistral AI, and Scale AI, revealing that it had made 20 AI-focused acquisitions and investments over the past few years. These layoffs are part of a broader trend in the tech sector, which has been reducing expenses this year to counterbalance substantial investments in AI. According to data from tracking site Layoffs.fyi, over 126,000 tech industry jobs have been cut across 393 companies since the beginning of the year. In a similar move, chipmaker Intel reduced its workforce by over 15 percent, or about 17,500 employees, in August in an effort to revitalize its unprofitable manufacturing operations.