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Cisco Systems plans to cut about 4,000 employees as part of a broader strategic shift to artificial intelligence (AI), following a better-than-expected earnings report on Wednesday.
The company’s layoffs, which represent less than 5% of its global workforce, sent shares up about 20% in after-hours trading.
The San Jose-based technology giant said the move reflects its strategy to position itself for the AI era by directing investments to the most in-demand and high-value areas.
“We’re confident Cisco will be one of those winners, and that means making difficult decisions,” said Cisco CEO Chuck Robbins.
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Cisco’s planned job cuts represent about 5% of its global workforce. (David Paul Morris/Bloomberg via Getty Images, File/Getty Images)
“As a result, we are making changes today that will result in a total workforce reduction of less than 4,000 employees in the fourth quarter, representing less than 5% of our total employee base.”
Hours earlier, the company reported third-quarter 2026 profits that significantly beat Wall Street expectations.
Revenue reached a record $15.8 billion, compared to expectations of $15.56 billion, and adjusted earnings per share were $1.06, compared to expectations of $1.04.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| CSCO | Cisco Systems Co., Ltd. | 101.87 | +2.58 |
+2.60% |
Year-over-year sales growth reached 12%, up from $14.15 billion in the same period last year, which ended around April 26.
Cisco also announced that it has secured $5.3 billion in AI infrastructure orders from hyperscalers since the beginning of the year. If this momentum continues, the company expects AI orders to be around $9 billion in fiscal 2026, up from its previous forecast of $5 billion. The division’s 2026 revenue is also expected to reach $4 billion, revised upward from the $3 billion forecast.
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Chuck Robbins, CEO of Cisco Technologies Inc., spoke at the Semaphore Global Economic Summit held during the International Monetary Fund (IMF) and World Bank Spring Meetings on April 15 in Washington, DC. (Aaron Schwartz/Bloomberg)
Despite reporting record revenues, the company said it will issue employee notices across its global operations starting May 14 as it continues to shift focus to high-growth areas such as AI, security and networking.
The company said it would support affected employees with severance packages, extended training resources and job placement assistance through internal and external recruitment services programs, which the company said helped approximately 75% of participants secure new roles.
Cisco plans to lay off about 4,000 employees amid its AI push. (Photo illustration Omar Marques/SOPA Images/LightRocket via Getty Images / Getty Images)
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Cisco estimates that the restructuring plan, including severance and related costs, will result in pre-tax costs of up to $1 billion.
The company expects to recognize approximately $450 million of these charges in the next quarter, with the remainder expected to be recorded in fiscal 2027.
