Cisco Systems announced on Wednesday that it will lay off fewer than 4,000 employees, representing less than 5 percent of its total workforce, as part of a restructuring effort to focus more heavily on artificial intelligence. The job cuts were disclosed in a company memo from CEO Chuck Robbins and in a regulatory filing.<\/p>\n
The layoffs come as the networking equipment maker reported stronger than expected quarterly financial results and raised its sales forecast, citing growing demand for AI infrastructure. Cisco said its third quarter fiscal year 2026 revenue reached $15.8 billion, an increase of 12 percent year over year.<\/p>\n
In a filing with securities regulators on Wednesday, Cisco stated that the restructuring is expected to cost up to $1 billion, primarily due to severance expenses. The company anticipates recording approximately $450 million of those charges in the current quarter, with the remaining costs extending into fiscal year 2027.<\/p>\n
According to Robbins' memo, most notifications to affected employees will begin on May 14 and will continue globally in accordance with applicable local laws and regulations. The company plans to provide pro rated payment of fiscal year 2026 bonuses to impacted workers.<\/p>\n
Cisco said it will offer affected employees support through its placement services, which Robbins said has helped 75 percent of participants find their next role. The company also committed to providing one year of access to Cisco U courses and certifications covering AI, security, networking, and other areas.<\/p>\n
Robbins said the company is shifting investments toward areas 'where demand and long term value creation are strongest,' specifically mentioning AI chips, fiber optics, and security. The memo noted that Cisco plans to continue hiring in strategic areas while eliminating roles in others as part of the AI focused restructuring.<\/p>\n
The CEO cited a rapidly changing market with intensifying competition and a global shortage of components critical to supporting Cisco's portfolio and the AI buildout from customers. He stated that companies that will succeed in the AI era will be those that continuously shift investment toward high demand areas.<\/p>\n
Cisco joins a growing list of technology companies that have tied layoffs to AI related efficiencies and broader organizational changes. The company's stock was up more than 17 percent in after hours trading following the announcement.<\/p>\n
Despite the job cuts, Cisco reported record quarterly revenue and double digit growth on both the top and bottom lines. The company raised its sales forecast on the back of increasing demand for AI infrastructure, indicating that the restructuring is aimed at positioning the company for long term growth in the AI sector.<\/p>\n
Robbins emphasized that the company is 'making hard decisions about where we invest, how we are organized, and how our cost structure reflects the opportunity in front of us.' He expressed confidence that Cisco will be among the winners in the AI era through focus, urgency, and discipline in investment allocation.<\/p>\n
The company said it will discuss the changes and answer employee questions at an internal meeting scheduled for May 21.<\/p>\n","protected":false},"excerpt":{"rendered":"
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