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ByNN Desk
Cisco Eliminates 4,000 Jobs as Company Shifts Focus to AI
The cuts come as Cisco posts record quarterly revenue of $15.8 billion and sharply raises its forecast for AI infrastructure orders.
The cuts come as Cisco posts record quarterly revenue of $15.8 billion and sharply raises its forecast for AI infrastructure orders.
Cisco Systems said it will eliminate fewer than 4,000 jobs, representing less than 5% of its global workforce, as the San Jose-based networking company redirects capital toward artificial intelligence infrastructure, cybersecurity, and silicon development.
The announcement accompanied third-quarter fiscal 2026 earnings that exceeded Wall Street expectations. Revenue reached $15.8 billion for the quarter, up 12% from $14.15 billion in the same period a year earlier, the company disclosed. Adjusted earnings per share came in at $1.06.
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In a companywide memo published on May 13, CEO Chuck Robbins said the restructuring reflects the discipline required to compete in the AI era. Most workforce notifications began on May 14 and will continue globally in line with local labor laws, per the memo.
The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest.
CEO Chuck Robbins, Cisco Systems.
The restructuring is expected to carry pre-tax charges of up to $1 billion, primarily from severance costs. Cisco said it plans to record approximately $450 million of those charges in the current quarter, with the remainder recognized in fiscal 2027.
Separately, Cisco disclosed it has secured $5.3 billion in AI infrastructure orders from hyperscale customers since the start of fiscal 2026. The company revised its full-year AI order forecast upward to approximately $9 billion, from a prior estimate of $5 billion, and raised its AI revenue projection to $4 billion for the fiscal year, up from $3 billion.
The move comes as Cisco accelerates investment in areas Robbins identified as strategic priorities: silicon, optics, and security. The company said it will continue hiring in those segments while reducing headcount elsewhere. Affected employees will receive severance, one year of access to Cisco’s internal training platform covering AI, security, and networking courses, and job placement support through a company program that Robbins said has helped 75% of participants secure new roles.
The cuts are the latest in a series at Cisco. The company conducted two separate rounds of layoffs in 2024 and reduced headcount by more than 150 positions in 2025, per public reporting. Cisco shares rose more than 17% in after-hours trading following the earnings disclosure.
The company is scheduled to hold an all-hands meeting on May 21 at 8 a.m. PT to address employee questions about the restructuring, per Robbins’ memo.
Disclaimer: This news is based on publicly available information. NervNow has not independently verified any claims.
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