Cisco said on May 13 it plans to cut nearly 4,000 jobs, or less than 5% of its roughly 86,200-employee workforce, as part of a restructuring focused on artificial intelligence and related growth areas [1, 2, 3, 4]. The announcement came alongside its fiscal third-quarter earnings report, which beat analyst estimates with revenue of approximately $15.8 billion for the quarter ended April 25, 2026 [1, 2, 3].

CEO Chuck Robbins said the company must act with "focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest," identifying AI as a key focus. He added, "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 percent of our total employee base" [2, 4].

Most employee layoff notifications began on May 14 globally and will proceed per local laws, Robbins said [4]. The restructuring will cost up to $1 billion, with about $450 million expensed in Q4 and the remaining amount in fiscal 2027 [3, 5].

Cisco reported strong customer demand in networking products, with orders for networking gear growing more than 50% and data center switching orders rising more than 40% year-over-year in the quarter [2, 3, 5]. The company received $5.3 billion in AI infrastructure orders from hyperscale customers so far this fiscal year and expects this to reach $9 billion, up from a prior forecast of $5 billion [2, 3, 4]. CFO Mark Patterson said, "It is reasonable to expect at least US$6 billion of revenue on the AI hyperscale side in fiscal 2027." [2]

Alongside the cuts, Cisco intends to boost investments in silicon, optics, security, and increasing employee use of AI across the company while reducing headcount in some areas [2, 3, 4, 5]. The company is also increasing spending on cybersecurity to address ongoing vulnerabilities affecting customers' networks [6].

The reduction comes as hyperscaler capital expenditures spill downstream into networking infrastructure, commented Ryan Lee of Direxion, who said the layoffs follow this broader shift and reflect demand beyond chips [2].

Cisco raised its fiscal 2026 full-year revenue forecast to a range of $62.8 billion to $63 billion, up from the prior $61.2 billion to $61.7 billion estimate [2, 3, 5].