Cisco cuts 4,000 jobs

Cisco said on May 13 that it would cut fewer than 4,000 jobs as part of a restructuring designed to redirect spending toward artificial intelligence and other growth areas. The San Jose, California, company disclosed the move alongside quarterly results that showed record revenue and a higher full-year forecast. (sec.gov) Cisco said stronger orders from hyperscale cloud customers helped lift demand for AI infrastructure and networking products. Shares rose in extended trading after the results, according to Reuters and other market reports. (money.usnews.com) ### How big is the job cut, and when does it happen? (investor.cisco.com) Cisco said the reduction will affect fewer than 4,000 roles, or less than 5% of its workforce, in the fiscal fourth quarter. The company had about 86,200 employees as of July 26, according to Reuters’ account of the filing and Cisco’s disclosures. The May 13 filing said the restructuring is intended to let Cisco invest in “key growth opportunities,” including silicon, optics, security and AI. Cisco did not identify specific business units in the filing, but media reports said the cuts span multiple teams. (sec.gov) ### What will the restructuring cost Cisco? Cisco said the plan is expected to cost as much as $1 billion, largely for severance and related charges. About $450 million of that amount is expected to be recognized in the fourth quarter, with the rest falling into fiscal 2027. (money.usnews.com) The 8-K filed with the Securities and Exchange Commission on May 13 said Cisco’s forward-looking statements include risks tied to “the benefits of restructurings and possible changes in the size and timing of related charges.” That language leaves room for the final cost or timing to change. (sec.gov) ### What in the quarter gave Cisco room to make this move? Cisco reported fiscal third-quarter revenue of $15.8 billion for the period ended April 25, up 12% from a year earlier. Net income on a GAAP basis was $3.4 billion, or 85 cents a share, while non-GAAP net income was $4.2 billion, or $1.06 a share. (money.usnews.com) Chuck Robbins, Cisco’s chief executive, said in the earnings release that the company delivered record quarterly revenue and saw “very strong, broad-based demand.” Cisco said total product orders rose 35% year over year, or 19% excluding hyperscalers, while networking product orders grew by more than 50%. (sec.gov) ### How much of this is about AI and hyperscalers? Cisco said it had taken in $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. The company also raised its expected fiscal 2026 AI-related revenue to $4 billion from $3 billion. (newsroom.cisco.com) Data center switching orders grew more than 40% and campus networking orders rose more than 25%, according to Cisco’s earnings materials. Those figures point to demand not only from hyperscale AI buildouts but also from broader network upgrades across enterprise customers. (investor.cisco.com) That reading is an inference from Cisco’s disclosed order categories and revenue guidance. ### What did Cisco change in its outlook? Cisco raised its fiscal 2026 revenue forecast to a range of $62.8 billion to $63.0 billion, according to earnings-call summaries and company materials. The company also guided fourth-quarter revenue to $16.7 billion to $16.9 billion. (investor.cisco.com) Mark Patterson, Cisco’s chief financial officer, told investors on the earnings call that the company was balancing investment in growth areas with operating discipline. Reuters reported that the stronger forecast followed a surge in cloud and network orders. (investor.cisco.com) ### What comes next for employees and investors? Cisco said most of the restructuring charges will begin hitting results in the fiscal fourth quarter and continue into fiscal 2027. That means the company’s next earnings report is likely to provide the first fuller accounting of how many positions were eliminated and how much of the planned $1 billion charge has been booked. (finance.yahoo.com) Cisco’s investor relations site shows the company reported third-quarter fiscal 2026 results on May 13, 2026, for the period ended April 25. Based on Cisco’s regular quarterly reporting cycle, investors will next look for fourth-quarter results and any update on restructuring execution later in the summer. (finance.yahoo.com) (investor.cisco.com) (money.usnews.com)