Why the layoff?
well, it's complicated.
The Innovator's Dilemma, popularized by Clayton Christensen, describes the challenge faced by companies like Cisco when they have to decide whether to invest in disruptive technologies that could cannibalize their existing, profitable businesses.
Cisco Systems is a networking company. The "bridge" in the logo symbolizes a box they built in the early years.
Cisco has failed to deal with the Inovator's dilemma multiple times, mainly due to its acquisition-driven growth strategy.
Cisco missed the move to SDN and is still suffering from it.
Meraki vs Catalyst in switching and wireless
Viptela vs Meraki SDWAN in WAN
Sourcefire vs Legacy in Security
AppD vs Splunk in the DC
there are so many other examples of competing products within cisco...
Think of Cisco not as a large struggling legacy tech company but rather as a dozen, smaller (and competing) legacy tech companies. The infighting is embarassing. and now that the Hunger Games have begun, expect more of that.
So, Cisco was content, sitting on a mountain of cash from selling routers and switches. They were too comfortable to gamble that on some crazy new tech like cloud computing or software-defined networking. Their existing customers cared about stability, not experimentation. Cisco, with their existing cusomers and a solid brand, did OK.
Enter AI...
To understand why Cisco is failing in AI you need to understand a bit about Technical Debt. In order to maintain market leadership in a stable product lien such as Routing and Switching,
Cisco prioritizes speed to market over code quality. Remember that the competition for Cisco's bread & butter is fierce. Juniper, Arista, HPE, Huwawei, Nile, etc all are taking market share away. Cisco's core fight leads to a buildup of technical debt as new features are rushed out the door.
When it's time to pivot towards a new techhnology, such as AI, this accumulated technical debt becomes a major obstacle. The legacy codebase is difficult to understand, modify, or extend, slowing down development and innovation. rember that Cisco has multiple legacy codebases, not just one. Now, In order to try to buy their way out of this self inflicted wound, cisco buys Splunk for $28 billion dollars. Splunk promises to bring the data, the lifeblood of AI, to Cisco. But Splunk is also legacy tech.
Splunk has it's own technical debt and ALSO competes with a bunch of Cisco product lines. if past is prologue, they will not integrate these products but rather splinter and confuse their customers (and employees) even further.
which brings up another point here. Cisco (and Splunk's) technical debt is not confined to product, it also shows up in theri go to market. the tools, systems and labyrinthine processes they force on their customers just to buy from them is a cruelty. The confusing and overlapping products make it hard to be technical support or engineer. Cisco's customers usually have other vendors they work with and the shift away from Cisco is not as much technically driven but rather abject frustration with the muck. complain and you get a link to an hourlong droning powerpoint that barely addresses your concern.
Basically, Cisco got so good at selling boxes that they forgot how to think outside them.