Cisco plans to cut around 4,000 jobs, or less than 5% of its workforce, as it increases investment in AI-related growth areas including silicon, optics, security, and AI infrastructure.
The restructuring comes alongside strong quarterly results, with Cisco reporting 12% year-over-year revenue growth to $15.8 billion and raising its guidance for the rest of fiscal 2026.
In a memo to employees, CEO Chuck Robbins framed the layoffs as part of a broader effort to shift resources toward areas with stronger long-term demand. Cisco said it expects to take up to $1 billion in restructuring charges tied to severance and related costs.
The announcement places Cisco among a growing group of technology companies restructuring around AI priorities. Firms including Meta, Cloudflare, and Block have also linked layoffs or workforce changes to AI investment strategies over the past year. The pattern reflects a broader recalibration happening across the industry: companies are maintaining or increasing spending on AI infrastructure and automation while reducing investment in slower-growth or overlapping business areas.
What stands out in Cisco’s case is that the cuts are arriving during a period of financial strength. The company reported record quarterly revenue and described demand for its AI-related networking infrastructure as some of the strongest in its history. Cisco also pointed to rising demand from hyperscalers building out AI capacity.
That combination of growth and layoffs highlights an emerging trend in enterprise tech. AI spending is not simply additive. Companies are increasingly reshuffling budgets, talent, and operating structures around AI priorities, even when overall business performance remains healthy.
The restructuring also reflects a larger shift underway in networking and infrastructure markets. Traditional networking vendors are positioning themselves as foundational AI infrastructure providers, especially around data center networking, silicon, and security. As AI workloads drive changes in traffic patterns and infrastructure requirements, networking companies are increasingly treating AI as a core business driver rather than an adjacent opportunity.
View Chuck Robbin’s email to his employees and the full earnings report.
