Cisco lays off as the company moves deeper into AI after a strong quarter
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Cisco Systems plans to cut about 4,000 jobs as part of a broader shift toward artificial intelligence (AI), following a stronger-than-expected earnings report on Wednesday.
The layoffs, which represent less than 5% of the company’s global workforce, sent shares up nearly 20% in after-hours trading.
The San Jose-based tech giant said the move reflects its strategy to position itself for the AI era by redirecting investment to areas with the strongest demand and highest value.
“I hope Cisco will be one of those winners. This means making some tough decisions,” said Cisco CEO Chuck Robbins.
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Cisco’s planned layoffs represent about 5% of the company’s global workforce. (David Paul Morris/Bloomberg via Getty Images, File / Getty Images)
“In light of this, we are making changes today that will result in a reduction in our overall workforce in Q4 of less than 4,000 jobs, which represents less than 5% of our total workforce.”
Earlier in the day, the company reported Q3 FY2026 earnings that were well above Wall Street expectations.
Revenue hit a record $15.8 billion, versus the $15.56 billion expected, while adjusted earnings per share came in at $1.06 versus the $1.04 expected.
| A ticker | Security | Finally | Change | Change % |
|---|---|---|---|---|
| CSCO | Company CISCO SYSTEMS INC. | 101.87 | +2.58 |
+2.60% |
Year-over-year revenue growth reached 12%, up from $14.15 billion in the same quarter last year, which ended on April 26.
Cisco also said it secured $5.3 billion in AI infrastructure orders from the hyperscaler year to date. If the momentum continues, the company expects to generate around $9 billion in FY2026 AI orders, up from the previous estimate of $5 billion. FY2026 revenue from this segment is also expected to reach $4 billion, revised upwards from $3 billion.
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Chuck Robbins, CEO of Cisco Technologies Inc., speaks at the Semaphore World Economy Summit during the International Monetary Fund (IMF) and World Bank Spring meetings, April 15, in Washington, DC. (Aaron Schwartz/Bloomberg)
Despite reporting record earnings, the company said it plans to issue layoff notices starting May 14 across its global operations as it continues to focus on high-growth areas such as AI, security and networking.
The company said it will support affected workers with severance packages, expanded training services, and employment assistance through its internal and external placement services program, which has reportedly helped nearly 75% of participants find new roles.
Cisco will lay off nearly 4,000 employees in the company’s AI division. (Photo by Omar Marques/SOPA Images/LightRocket via Getty Images/Getty Images)
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Cisco estimates that its restructuring plan, including severance and related costs, will result in pre-tax charges of up to $1 billion.
The company expects to see about $450 million of that cost in the next quarter, with the remainder to be recorded in fiscal 2027.
