Cisco to cut about 4,000 jobs May 13

Cisco said on May 13 it would eliminate fewer than 4,000 jobs as part of a restructuring that the company said would shift spending toward artificial intelligence, security and other growth areas. The cuts came with stronger-than-expected quarterly results and a higher full-year revenue forecast from the San Jose, California, networking company. (money.usnews.com) Cisco reported fiscal third-quarter revenue of $15.8 billion, up 12% from a year earlier, and said AI-related demand from hyperscale customers continued to accelerate. (letsdatascience.com) Shares rose more than 16% in extended trading after the announcement, with some market data services showing gains near 19%. ### How many jobs is Cisco cutting, and how large is that relative to its workforce? (crn.com) Cisco said the restructuring would reduce its workforce in fiscal fourth quarter 2026 by fewer than 4,000 jobs, representing less than 5% of its employee base. CEO Chuck Robbins described the move in a memo to staff as part of changes in where the company invests, how it is organized and how its cost structure matches the opportunities it sees. Reuters reported the total at nearly 4,000 jobs, while Cisco’s own language was “fewer than 4,000.” Business Insider and CRN, citing the internal memo, reported the same threshold. (money.usnews.com) ### What did Cisco tell investors at the same time? Cisco reported on May 13 that revenue for the quarter ended April 25 was $15.8 billion, GAAP net income was $3.4 billion, and non-GAAP net income was $4.2 billion. Non-GAAP earnings per share were $1.06, while GAAP earnings per share were $0.85, according to the company’s earnings release. The company raised its fiscal 2026 revenue guidance to $62.8 billion to $63.0 billion and said fourth-quarter revenue should be $16.7 billion to $16.9 billion. (crn.com) Cisco also said its guidance included the estimated impact of tariffs based on current trade policy. (money.usnews.com) ### Why did Cisco link the cuts to AI? Chuck Robbins said Cisco was seeing “very strong, broad-based demand” and singled out AI infrastructure as a driver of the updated outlook. The company said it had taken $5.3 billion of AI infrastructure orders year to date and raised its expectation for fiscal 2026 orders to $9 billion from $5 billion. Cisco also lifted its expected fiscal 2026 AI-related revenue to $4 billion from $3 billion. (investor.cisco.com) CRN reported Cisco told analysts the restructuring was meant to help shift resources into advanced AI, security and quantum networking technology. Business Insider, citing Robbins’ memo, said the company planned to direct more investment toward AI chips, fiber optics and security. (investor.cisco.com) ### How did investors react? Cisco shares closed regular trading on May 13 at $101.87, up 2.6%, before jumping in after-hours trading. Yahoo Finance showed the stock at $121.59 overnight, up 19.36%, while CNBC reported a gain of about 17% after the earnings release and restructuring announcement. Bloomberg reported the stock gained as much as 19% in late trading after Cisco gave a better-than-anticipated sales forecast and announced the job cuts. (investor.cisco.com) Reuters reported the shares rose more than 16% in extended trading. ### What has Cisco said about severance and timing for affected workers? (crn.com) May 13 reports citing Cisco’s internal memo said affected employees would receive local notifications with details on severance and timing. The company said the workforce reduction would take place in the fourth quarter of fiscal 2026. (finance.yahoo.com) Cisco’s investor relations site shows the company filed an 8-K on May 13 alongside its quarterly results. The earnings materials and conference-call replay were posted the same day on the company’s investor website. ### What comes next? Cisco said its next step is the fiscal fourth quarter, when the workforce reduction is scheduled to occur and the company expects revenue of $16.7 billion to $16.9 billion. (bloomberg.com) The company also said its quarterly dividend of $0.42 per share will be paid on July 22, 2026, to shareholders of record on July 6. (investor.cisco.com 1) (investor.cisco.com 2) (crn.com)