Cisco cuts 4,000 jobs to refocus on AI infrastructure
Cisco announced Wednesday it will eliminate fewer than 4,000 positions, less than 5% of its workforce, as part of a restructuring focused on artificial intelligence. CEO Chuck Robbins said the company is shifting investments toward areas with the strongest demand and long-term value, including AI chips, fiber optics, and security.
The layoffs come as Cisco reported record quarterly revenue of $15.8 billion, up 12% year-over-year, and raised its sales forecast based on growing demand for AI infrastructure. The company's stock rose more than 17% in after-hours trading.
Financial impact and timeline
Cisco expects the restructuring to cost up to $1 billion, primarily in severance expenses. The company will record about $450 million in charges during the current quarter, with remaining costs extending into fiscal 2027.
Most notifications begin May 14 and will continue globally in compliance with local regulations. Affected employees will receive pro-rated bonuses for fiscal 2026.
Support for departing and remaining staff
Cisco's placement services program has helped 75% of participants find their next role. The company will provide one year of free access to Cisco U courses covering AI, security, networking, and other topics.
For employees staying at Cisco, leadership will address the restructuring at a company meeting May 21.
Strategic investment areas
While cutting positions in some departments, Cisco is making targeted investments in silicon, optics, security, and AI tools for employees. Robbins said the company plans to continue hiring in strategic areas.
Cisco joins other technology companies linking layoffs to AI-related efficiency gains and organizational changes. The networking giant faces intensifying competition and global component shortages that complicate its portfolio support and customer AI infrastructure buildouts.
Operations professionals managing organizational change may find value in understanding how AI drives restructuring decisions. AI for Operations covers how these technologies reshape business processes and efficiency. For managers overseeing transitions, the AI Learning Path for Operations Managers addresses workflow optimization during transformation periods.
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