Cisco has announced that it will cut fewer than 4,000 jobs, which will affect under 5% of its global workforce, as part of a broader restructuring aimed at aligning the company more with artificial intelligence
The decision was outlined in a memo from CEO Chuck Robbins, shared alongside the company's latest quarterly results.
“We are making changes today that will result in the reduction of our overall workforce in Q4 by fewer than 4,000 jobs, representing less than 5 per cent of our total employee base,” Robbins wrote in the memo obtained by Business Insider.
The layoffs come even as Cisco reported stronger-than-expected performance with revenue rising to $15.8 billion, up 12% year-on-year, and the company raising its sales outlook on the back of rising demand for AI-related infrastructure.
In a regulatory filing, Cisco said the restructuring will cost up to $1 billion, largely driven by severance and related expenses. Of this, around $450 million is expected to be recorded in the current quarter, with remaining charges extending into fiscal 2027.
Robbins framed the changes as part of a necessary realignment for the AI era, as he stated the company is shifting investments toward areas “where demand and long-term value creation are strongest.”
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The CEO noted that while some roles will be eliminated, Cisco will continue hiring in strategic segments tied to its future growth. “The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment,” he wrote and added that Cisco is positioning itself to be among those leaders.
According to the memo, employees impacted by the layoffs will begin receiving notifications starting May 14, with the process rolling out globally in accordance with local laws.
Affected staff will be eligible for pro-rated FY26 bonuses along with severance support and access to Cisco's placement services program, which the company says has helped about 75% of participants find new roles.
“We are also committed to continued personalised learning and will provide one year of access to all Cisco U courses and certifications, covering AI, Security, Networking, and more,” the memo further mentioned.
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While the restructuring signals job cuts in certain divisions, the company said that it will make “strategic investments” particularly in silicon, optical technologies and AI-driven internal transformation.
The move comes just days after cybersecurity firm Cloudflare announced plans to lay off more than 1,100 employees globally as part of a restructuring driven by AI. Like Cisco, Cloudflare made the announcement shortly after reporting first-quarter earnings that came in ahead of analyst expectations.
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