Job cuts come despite registering record revenue in its third quarter
Cisco will be reducing its workforce by about 4,000 jobs globally despite seeing a record revenue in its third quarter as the tech giant makes further investment in artificial intelligence tools.
Cisco CEO and Chair Chuck Robbins announced the layoffs on Thursday, saying the reductions will represent less than five per cent of its total workforce.
Employees impacted will be notified by their leaders directly starting May 14, while workers globally will be informed after alignment with applicable local laws and regulations.
Robbins said available resources, support, and benefits will be available to employees who are affected by the changes.
"This will include pro-rated payment of FY26 bonuses to impacted employees. We will provide support in finding new opportunities, whether internal or external, through Cisco's placement services," he said in the announcement posted on the company's website.
Affected employees will also retain access to all Cisco U courses and certifications, covering AI, Security, Networking, and more, for a year.
"To those leaving Cisco, thank you for your contribution, your dedication, and the mark you have made on this company. We are deeply grateful and are committed to handling this transition with the care, clarity, and respect that defines our culture," Robbins said.
Record revenue at Cisco
The layoffs at Cisco come despite the tech giant seeing a record revenue of $15.8 billion, up 12% year over year, in its third quarter FY26 earnings.
It also saw "double-digit top and bottom-line growth exceeding the high end of our guidance," according to Cisco's earnings summary.
"These results are even more impressive given the complex environment we're operating in – a rapidly changing market, with intensifying competition, and a global shortage of components critical to support our portfolio and the AI buildout from our customers," Robbins said.
But the CEO noted that the company has to make "hard decisions" on where it invests and its own cost structures in the middle of the AI era.
"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.
According to the CEO, Cisco will be making "clear, strategic investments" in silicon, optics, security, and in its employees' use of AI across the organisation.
"These investments are building from a position of strength – and focusing on the technologies and businesses that will accelerate our growth, deliver unmatched innovation to customers and partners, and define our future," Robbins said.
Cisco adds to the growing list of organisations making changes to their headcount as a result of their growing AI investments.
Experts have warned that making reductions based on AI's potential can be a risky move, with a report from Gartner noting that laying off employees due to AI adoption does not guarantee a return on investment.
