Tech Company Lays Off 5,500 Workers to Invest More in AI, Despite Making $10.3 Billion in Profit

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Tech Company Lays Off 5,500 Workers to Invest More in AI, Despite Making $10.3 Billion in Profit

Pink Slip Season

Despite tech conglomerate Cisco posting $10.3 billion in profits last year, it’s still laying off 5,500 workers as part of an effort to invest more in AI,

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.

It joins a litany of other companies like

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and Intuit, the maker of TurboTax, that have used AI as justification for the mass culling of its workforce.

The layoffs at Cisco came to light in a

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this week, affecting seven percent of its staff.

In a short

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, CEO Chuck Robbins used the term “AI” five times, highlighting the company’s efforts to keep up in the ongoing AI race.

Earlier this year, Cisco also

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, saying that the company wanted to “realign the organization and enable further investment in key priority areas.”

In short, companies are no longer hiding their optimism over replacing human labor with AI, an unfortunate reality for those looking to maintain a stable job. But whether this “realignment” will pay off in the long run ******** to be seen.

Red Herring

The layoff news helped boost

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, going from $45.04 in the morning to spiking over $48 per share in after-hours trading.

We’ve already seen similar spikes in the stock prices of other

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.

Cisc’s layoffs are also part of another pattern: tech companies saying they are shifting resources to boost their AI efforts and therefore they need to lay off people as part of a restructuring campaign.

While many companies have used AI as a public-facing excuse for their restructuring efforts, experts remain skeptical and think the tech is instead used as a cover.

“Fighting against robots is a nice cover story,” University of Oxford economist and data scientist Fabian Stephany

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earlier this year. “But if you have a closer look, it’s often old school, simple economic dynamics like outsourcing or lead management cutting costs to increase salaries in other places.”

More on tech layoffs:

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Lays Off 1,500 Workers, Blames “AI Wave”

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#Tech #Company #Lays #Workers #Invest #Making #Billion #Profit

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