Tech layoffs surge, led by mass purges at Intel, Cisco

Layoffs in the tech sector accelerated this month as Cisco (NASDAQ:CSCO) and Intel (NASDAQ:INTC) announced plans to lay off a combined total of nearly 21,000 employees.

On Aug. 14, Cisco announced a restructuring plan which includes cutting 7% of its global workforce, the company revealed in an SEC filing.

The plan will allow Cisco “to invest in key growth opportunities and drive more efficiencies in its business.”

It will cost the company up to $1B in severance and compensation, as well as other expenses. Cisco expects $700M to $800M of these charges to be incurred during the first quarter of fiscal 2025, while the rest will be spread out throughout the year. It is expected to affect at least 5,500 employees.

This is the second massive round of layoffs announced this year by the San Jose, Calif.-based tech giant. On Feb. 14, it revealed in another SEC filing it was cutting 5%, or about 4,000 employees, “to realign the organization and enable further investment in key priority areas.” Those layoffs cost $800M.

On Aug. 1, Intel revealed it was reducing its workforce of 110,000 by 15%, or roughly 15,000 employees.

“Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate,” Intel CEO Pat Gelsinger said in a note to employees. “Our revenues have not grown as expected – and we’ve yet to fully benefit from powerful trends, like AI. Our costs are too high, our margins are too low. We need bolder actions to address both – particularly given our financial results and outlook for the second half of 2024, which is tougher than previously expected.”

Also, on Aug. 5, German chipmaker Infineon (OTCQX:IFNNY) announced it would slash 1,400 positions globally.

“The recovery in our target markets is progressing only slowly,” Infineon CEO Jochen Hanebeck said. “Prolonged weak economic momentum has resulted in inventory levels in many areas overlaying end demand.”

So far in 2024, nearly 400 tech companies have laid off a total of 130,482 employees, according to the tracker Layoffs.fyi. At this rate, layoffs should surpass the 165,269 job reductions in the sector in 2022. It is unlikely, though, to surpass the 2023 full-year total of 264,220.

In 2024, employees working at hardware companies have been especially affected by layoffs.

For example, in 2022, the tracker only identified 3,605 layoffs in hardware companies. Layoffs in hardware companies totaled 24,459 in all of 2023. However, less than eight full months into 2024, the sector has already accounted for 24,706 layoffs.