Cisco’s AI Strategy: Innovation Without Layoffs Sets It Apart From Tech Rivals

Cisco’s Unique AI Strategy in Workforce Management

While many tech giants use artificial intelligence as a reason to cut jobs, Cisco Systems is taking a different path. CEO Chuck Robbins made it clear that Cisco is not planning to reduce its workforce because of AI. “I don’t want to get rid of a bunch of people right now,” he said in a CNBC interview.

Robbins highlighted that the goal is to enable Cisco’s engineers to innovate faster and boost productivity, giving the company a competitive edge. This approach contrasts sharply with companies like Microsoft and Amazon, which recently made significant layoffs—Microsoft cut around 9,000 jobs in early July.

Robbins acknowledged that the industry broadly expects hiring slowdowns as AI matures, but he stopped short of ruling out similar actions at Cisco in the future.

What Drives Cisco’s AI Strategy?

Cisco’s recent quarterly results show the company’s strategy is working. It exceeded expectations for revenue and earnings and provided a positive outlook for growth.

A key factor is Cisco’s increased focus on AI infrastructure. The company has already booked over $800 million in AI infrastructure orders this past quarter, more than doubling its original $1 billion target for fiscal year 2025. These orders mainly come from major “webscale” clients like Amazon, Meta, and Microsoft, who are intensifying their AI investments.

Despite this progress, Cisco’s stock dropped 1.5% recently due to weaker-than-expected performance in its security segment. This shortfall was linked to budget constraints impacting U.S. federal government contracts. Cisco had hoped for a stronger boost from its March 2024 acquisition of cybersecurity platform Splunk, but those benefits have not yet appeared.

Still, Cisco’s overall outlook remains strong. The company has already generated around $1 billion in AI revenue from webscale customers for fiscal 2025, signaling solid momentum in this area.

Why This Matters for Executives

• AI as a Productivity Tool: Cisco is focusing on using AI to improve employee output rather than cut costs through layoffs.
• Strategic Customer Base: Securing large webscale clients positions Cisco to benefit as AI adoption grows.
• Balanced Growth Approach: Despite short-term challenges in security, Cisco’s diversified strategy supports sustained expansion.

Executives looking to understand how AI impacts workforce planning and corporate growth can learn from Cisco’s model. For more on AI integration within companies, explore relevant AI courses that focus on practical business applications.