Cisco will cut thousands of jobs in a second round of layoffs this year as the networking equipment maker shifts focus to higher-growth areas, including cybersecurity and AI, according to people familiar with the matter. The number of people affected could be similar to or slightly higher than the previous layoff and will likely be announced as early as Wednesday alongside the company’s fourth-quarter results, said the sources, who were not authorized to speak publicly. Cisco laid off 4,000 employees in February.

As of July 2023, the company employed around 84,900 people, according to its annual filing, a number that does not account for the February layoffs. Cisco did not immediately respond to a Reuters request for comment. Cisco, the largest maker of routers and switches that direct internet traffic, has been grappling with sluggish demand and supply-chain constraints in its mainstay business.

Cisco shifts focus amidst layoffs

These challenges have pushed the company to diversify with moves such as its $28-billion buyout of cybersecurity firm Splunk, completed in March. The acquisition aims to reduce reliance on one-time equipment sales by boosting its subscription business.

The company has been trying to incorporate AI products in its offerings and reiterated its target of $1 billion worth of AI product orders in 2025. In June, it launched a $1-billion fund to make investments in AI startups such as Cohere, Mistral AI, and Scale AI. The layoffs are the latest in the tech industry, which has been cutting costs this year.

Over 126,000 people have been laid off across 393 tech companies since the start of the year, according to data from tracking website Layoffs.fyi.