Even as hardware companies struggle to keep up with rapid technology shifts, analysts and recruiters believe that Cisco Systems Inc’s announcement on Wednesday that it plans to lay off 5,500 employees is unlikely to be the last round of Silicon Valley pink slips.

Analysts say that as mobile applications and cloud computing become increasingly important, the most and especially vulnerable are those companies that traditionally have made most of their money selling computers, chips, servers, routers and other equipment.

In April, Intel announced that it was laying off 12,000 workers and the announcement of Cisco layoffs come in the wake of Intel’s announcement. After Dell Inc closes a $67 billion deal to acquire data storage company EMC Corp, it is expected that there would be job cuts in the company after the IT giant said in January that it had shed 10,000 jobs.

According to outplacement consultancy Challenger, Gray & Christmas, Inc. about 63,000 jobs have been shed so far this year by technology companies in the United States.

“The hi-tech industry is going through a serious deconstruction. There is more pain to come,” said Trip Chowdhry, an analyst at Global Equities Research.

As more companies subscribe to “super cloud” services from the likes of Amazon.com Inc and Microsoft Corp, the job cuts are expected to rise drastically, believes Chowdhry. He said that these services eliminate the need for workers to manage various technology layers as they manage hardware, software, networks and databases.

Layoffs in the tech industry would hit 330,000 this year, Chowdhury had estimated in January. He had raised his estimate to 370,000, he said this week. Some other analysts said that forecast was too bleak.

Analysts say that the next to shed workers could be IBM Corp, Hewlett Packard Enterprise Co, Oracle Corp and Dell Inc. IBM could not be immediately reached for comment and Hewlett Packard Enterprise, Dell and Oracle declined comment.

“Tech incumbents are all bracing for the tremors of change. We fully expect a lot of collateral damage as this plays out – not just with Cisco,” said Glenn O’Donnell, an analyst at Forrester Research.

A challenging shift to software-oriented services has been pursued by Cisco and other old-guard technology companies. Roger Kay, an analyst at Endpoint Technologies Associates says that due to the fact that software services have “fewer people involved on the cost side” and because they bring recurring revenue, margins in software services are higher than hardware.

This means that there could possibly be more job cuts. Mixed views about the fate of hardware engineers laid off at Cisco and other tech firms were presented by Silicon Valley job recruiters.

“Nobody wants to be laid off but if job elimination is going to happen, 2016 is not a bad time for it to happen,” said John Reed, Senior Executive Director of the tech recruitment firm Robert Half Technologies.

Despite this if hardware engineers want to find work, they may need to be flexible and willing.

“Nobody wants hardware designers and engineers. aThere was a moment in time when devices were hot and (action-camera maker) GoPro made everyone excited about devices, but a lot of those types of companies died on the vine,” said Andy Price of executive search firm SPMB.

(Adapted from Reuters)