Cisco cuts 4,000 jobs

Cisco said on May 13 that it would cut fewer than 4,000 jobs in the fourth quarter of its 2026 fiscal year, even as the company reported record quarterly revenue and raised its outlook for AI-related business. The San Jose, California, networking company said the cuts would amount to less than 5% of its total workforce. (investor.cisco.com) Cisco framed the move as a restructuring tied to investment priorities rather than a response to weak demand. Most employee notifications were set to begin on May 14 and continue globally in line with local laws, the company said. The same day, Cisco reported fiscal third-quarter revenue of $15.8 billion for the period ended April 25, up 12% from a year earlier. (blogs.cisco.com) GAAP net income was $3.4 billion, or $0.85 per share, and non-GAAP net income was $4.2 billion, or $1.06 per share, according to the company’s earnings release. Cisco also lifted its fiscal 2026 guidance and said AI infrastructure orders taken year to date had reached $5.3 billion. ### Why is Cisco cutting jobs after posting record revenue? Chuck Robbins, Cisco’s chair and chief executive, told employees the company was making “hard decisions” about investment, organization and cost structure as it shifts resources toward higher-priority areas. (investor.cisco.com) In a company blog post published May 13, Robbins said the workforce reduction would help Cisco align spending with “the opportunity in front of us.” Cisco did not describe the move as a broad retrenchment tied to falling sales. The company instead linked the restructuring to spending on AI, security and networking-related products, while its earnings release pointed to strong demand in core networking and hyperscaler AI infrastructure. (investor.cisco.com) ### Which businesses is Cisco prioritizing? Cisco said on May 13 that networking product orders grew by more than 50% year over year and data center switching orders rose by more than 40%. The company also said campus networking orders increased by more than 25% and described a “major multi-year, multi-billion-dollar campus networking refresh cycle” as underway. (blogs.cisco.com) Robbins said in the company post that Cisco would keep investing in areas tied to AI adoption, including infrastructure, security and other growth businesses. Trade publication CRN, citing Robbins’ memo, reported that Cisco was shifting resources toward “advanced AI, security, and quantum networking technology.” (investor.cisco.com) ### How big is Cisco’s AI business now? Cisco said AI infrastructure orders from hyperscalers had reached $5.3 billion so far in fiscal 2026, prompting the company to raise its full-year orders expectation to $9 billion from $5 billion. It also raised expected fiscal 2026 AI revenue to $4 billion from $3 billion. (investor.cisco.com) CNBC reported that investors had been looking for clearer evidence that Cisco could translate demand for AI networking gear into sustained growth. After the earnings report, Cisco shares rose in extended trading, according to CNBC. ### Is this Cisco’s first large layoff? (blogs.cisco.com) Cisco announced another major workforce reduction in February 2024, when it said it would cut about 5% of its global workforce as part of a restructuring plan. The company’s August 2024 annual report showed Cisco had 90,400 employees at the end of fiscal 2024. The latest reduction, at fewer than 4,000 jobs, is smaller in percentage terms than the 2024 cut but still ranks among Cisco’s largest recent workforce moves. (investor.cisco.com) Outside reports including SFGATE and TechCrunch said the new plan affects roughly 5% of employees, based on current headcount estimates. (cnbc.com) ### What happens next for employees and investors? Cisco said most layoff notifications would begin on May 14 and proceed globally in accordance with local legal requirements. The company did not publicly break out which teams or geographies would be most affected. On May 18 and May 19, Cisco executives are scheduled to appear at the J.P. (sec.gov) Morgan 2026 Global Technology, Media and Communications Conference, according to the company’s investor events page. Investors will also be looking toward Cisco’s fiscal fourth-quarter results, for which the company guided to revenue of $16.7 billion to $16.9 billion and non-GAAP earnings per share of $1.16 to $1.18. (investor.cisco.com) (blogs.cisco.com) (sfgate.com)