Dive Brief:
- Cisco Systems will cut nearly 4,000 jobs — representing less than 5% of its workforce — in a broad restructuring aimed at sharpening its focus on artificial intelligence and other high-growth areas, the company said Wednesday.
- The announcement coincided with Cisco’s latest quarterly earnings report, which highlighted accelerating AI demand. The company posted total revenues of $15.8 billion for its fiscal 2026 third quarter ended April 25, up 12% year over year. It also reported $1.9 billion in AI infrastructure orders from hyperscalers in the quarter and expectations of about $9 billion in such orders in fiscal 2026.
- “This was really not a savings-driven restructure,” Cisco CFO Mark Patterson said during a Wednesday earnings call. “It's really things are moving incredibly fast right now, and this is more [about] realigning … resources around silicon, optics, security and AI.”
Dive Insight:
The move reflects a trend across the technology sector, where companies are restructuring workforces to align with shifting priorities driven by AI.
U.S. technology companies announced 33,361 job cuts in April, bringing the sector’s total layoffs for the first four months of 2026 to 85,411 — a year-over-year increase of 33%, outplacement firm Challenger, Gray & Christmas said last week.
In a Wednesday blog post, Cisco CEO Chuck Robbins said the company is reducing its workforce as rapid AI-driven change forces “hard decisions.”
“The companies that will win in the AI era will be those with focus, urgency and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest,” he said.
Most layoff notifications will probably begin Thursday and continue globally “in alignment with applicable local laws and regulations,” Robbins said.
The company will offer laid off employees pro-rated fiscal 2026 bonus payments, job placement support, and one year of access to Cisco University courses and certifications, he said.
As part of the restructuring effort, the company expects up to $1 billion in pre-tax charges, with $450 million to be recognized in the company’s fiscal Q4 and the remainder during the next fiscal year, Patterson said during the earnings call.
