Cisco cuts 4,000 staff

Cisco said on May 13 that it would reduce its workforce by fewer than 4,000 jobs in the fourth quarter of fiscal 2026, pairing the cuts with severance, placement services and a year of free access to Cisco training courses and certifications. The announcement came the same day the company reported record quarterly revenue of $15.8 billion and net income of $3.4 billion for the quarter ended April 25. Chief Executive Chuck Robbins said the changes were part of a resource shift toward silicon, optics, security and broader use of artificial intelligence inside the company. Most employee notifications were set to begin on May 14 and continue globally under local labor rules. ### How large is the layoff, and when do notices start? Chuck Robbins wrote in a May 13 message to employees that Cisco would reduce its overall workforce in the fourth quarter by fewer than 4,000 jobs, representing less than 5% of its total employee base. He said most notifications would begin on May 14 and would continue globally in line with applicable local laws and regulations. (blogs.cisco.com) CRN reported that Cisco described the move to analysts as a corporate restructuring meant to reallocate resources toward strategic growth areas. The trade publication also reported that the company expected the action to result in up to $1 billion in pre-tax charges, with about $450 million expected in the fourth quarter of fiscal 2026 and the rest in fiscal 2027. (blogs.cisco.com) ### Why is Cisco making the cuts while reporting record results? Cisco reported on May 13 that third-quarter revenue rose 12% year over year to $15.8 billion, while GAAP net income increased to $3.4 billion, or $0.85 per share. The company also raised its full-year fiscal 2026 revenue guidance to $62.8 billion to $63.0 billion and said it expected fourth-quarter revenue of $16.7 billion to $16.9 billion. (crn.com) Robbins said in his employee note that the company was operating in a “rapidly changing market,” with intensifying competition and a shortage of components tied to customer AI buildouts. He said Cisco was making “hard decisions” about investment, organization and cost structure, and that the company would shift spending toward areas where demand and long-term value creation were strongest. (investor.cisco.com) ### Which businesses is Cisco prioritizing? Cisco said the restructuring would support investment in silicon, optics, security and employees’ use of AI across the company. Robbins told employees those were the areas where Cisco planned to make “clear, strategic investments” even as it reduced roles elsewhere. (blogs.cisco.com) The earnings release gave more detail on where demand was rising. Cisco said total product orders were up 35% year over year, networking product orders rose more than 50%, campus networking orders grew more than 25%, and data center switching orders increased more than 40%. The company also said it had taken $5.3 billion of AI infrastructure orders year to date and raised its fiscal 2026 expectation for those orders to $9 billion from $5 billion. (blogs.cisco.com) ### What is Cisco offering affected employees? Cisco said impacted workers would receive details from their leaders on timing, resources, support and benefits in each country. Robbins also said affected employees would receive pro-rated fiscal 2026 bonus payments. The company said it would provide support for internal or external job searches through Cisco placement services, which Robbins said had helped 75% of participants find their next role. (investor.cisco.com) Cisco also said it would provide one year of access to Cisco U courses and certifications covering AI, security and networking. (blogs.cisco.com) ### How does this compare with Cisco’s earlier cuts? The Register reported that Cisco had already made two large rounds of layoffs in 2024, including one reduction of 7% of staff and another of 5%. The publication said the latest action came as Cisco’s AI-related and hyperscaler business expanded. (blogs.cisco.com) Cisco’s own public statements on May 13 did not frame the move as a response to weak demand. Instead, the company tied the cuts to a reallocation of resources during a period of strong orders and rising AI infrastructure sales. ### What happens next inside Cisco? May 21 is the next date Cisco named for employees after the announcement. (theregister.com) Robbins said Cisco would discuss the changes and answer questions at a Cisco Beat meeting scheduled for 8 a.m. Pacific that day. Cisco’s fiscal fourth quarter guidance and restructuring timeline mean investors and employees will also be watching for the company’s next earnings update, after notices that began on May 14 continue under local legal requirements. (blogs.cisco.com)