Cisco cuts 4,000 jobs despite record revenue as AI investments accelerate
Cisco is laying off about 4,000 employees globally, less than 5% of its workforce, CEO Chuck Robbins announced Thursday. The cuts come as the company reported record third-quarter revenue of $15.8 billion, up 12% year over year.
Robbins said the reductions reflect strategic choices about where the company invests during the AI era. "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," he said.
What affected employees will receive
Cisco is offering departing workers pro-rated bonuses for the current fiscal year, placement services to find new roles internally or externally, and one year of access to all company training courses covering AI, security, and networking.
Managers will notify affected employees starting May 14. The company will inform workers globally after aligning with local employment laws and regulations.
The investment shift
Cisco plans to direct resources toward silicon, optics, security, and AI adoption within the organization. Robbins described the company's operating environment as complex, with intense competition and component shortages affecting the industry.
The layoffs add Cisco to a growing list of tech companies reducing headcount while increasing AI spending. Research firm Gartner has cautioned that workforce reductions tied to AI adoption don't guarantee financial returns.
For HR professionals managing similar organizational changes, understanding the strategic and operational implications of AI-driven workforce planning is increasingly critical. Learn more about AI for Human Resources, or explore AI strategy resources for CHROs managing enterprise-level talent decisions.
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