Cisco cuts 4,000 jobs to reallocate resources towards AI despite record quarterly revenue

Cisco cuts nearly 4,000 jobs to spend more on AI, reports 'record quarterly revenue' | TechCrunch

Technology giant Cisco is cutting fewer than 4,000 jobs, or around 5% of its workforce, despite reporting better-than-expected profit and revenue in its fiscal third quarter. The networking equipment maker said it reducing its headcount in order to change its "cost structure" and invest in AI and cybersecurity. Cisco's decision follows a recent trend of tech companies increasingly citing a priority on AI spending as a reason to let employees go. Cloudflare and General Motors have both laid off staff in recent days, despite reporting strong financial results. Cisco said it plans to invest more in cybersecurity, as the company continues to contend with a slew of security vulnerabilities in its routers and firewalls that have allowed hackers to break into the networks of its corporate customers, including the U.S. government. Cisco last year also experienced a data breach in which customers' personal information was affected. In a blog post published Wednesday, Cisco's chief executive Chuck Robbins touted the company's "record revenue" and "double-digit growth," while acknowledging that the company was making strategic investments "in our employees' use of AI across the company." According to public filings, Robbins was slated to earn more than $52 million in executive compensation during 2025. A Cisco spokesperson did not return a request for comment, or say, when asked by TechCrunch, if Robbins plans to reduce his compensation.

Cisco to cut about 4,000 jobs in AI-focused restructuring as orders surge

May 13 (Reuters) - Cisco (CSCO.O), opens new tab said on Wednesday it would cut nearly 4,000 jobs, as part of a restructuring aimed at shifting investment toward artificial intelligence and related growth areas, and raised its annual revenue forecast after a surge in hyperscaler orders. Shares of the San Jose, California-based networking equipment maker rose 15% in extended trading. "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," CEO Chuck Robbins said in a post on Cisco's website. Cisco said it was making strategic investments in silicon, optics, security and employees' use of AI across the company, as it reduces roles in some areas. The company has taken $5.3 billion in AI ⁠infrastructure orders from hyperscalers so far this fiscal year, and raised its full-year order expectation to $9 billion from $5 billion previously. It now expects fiscal 2026 revenue in the range of $62.8 billion to $63 billion, compared with its ⁠earlier forecast of $61.2 billion to $61.7 billion. CEO Robbins said the company would reduce its workforce by fewer than 4,000 jobs in the fourth quarter, representing less ⁠than 5% of its employee base. It had about 86,200 employees, as of July 26 last year. The restructuring plan is expected to ⁠cost Cisco up to $1 billion, with about $450 million to be recognized in the fourth quarter and the rest in fiscal 2027. Reporting by Juby Babu in Mexico City; Editing by Shinjini Ganguli Our Standards: The Thomson Reuters Trust Principles., opens new tab

Cisco CEO says tech is entering a 'networking supercycle' as stock pops 14% on strong AI demand

Cisco CEO Chuck Robbins: There's a networking supercycle that we're entering right now Cisco CEO Chuck Robbins told CNBC on Thursday that skyrocketing demand for artificial intelligence tools and equipment is powering the industry toward a "networking supercycle." Shares jumped 14% and headed for their best day in more than two decades after Cisco blew past its AI infrastructure and hyperscaler guidance orders for the fiscal year and lifted its forecast from $5 billion to $9 billion. The California-based networking equipment maker also said it will cut about 5% of its workforce as it shifts focus toward AI-focused segments, silicon, and optics. "Given the speed at which the market is moving, we need to make a rapid reallocation of resources," Robbins told CNBC. "By the way, a lot of the people that are potentially impacted will actually go take those jobs." Cisco has lagged its hyperscaler peers in the AI race being led by Nvidia. But the company recently surpassed its internet boom highs as investors bet on its networking infrastructure needed to run data centers, and the AI trade broadens.

From Cisco to Block, more companies are pointing to AI when unveiling job cuts

That's unnerving workers across sectors, with many fearing what the rapid adoption of AI will mean for their job prospects. Even if AI isn't replacing people directly, some businesses have announced reductions as they redirect money to the technology or tout new ways to streamline operations -- raising alarm about what might be left over for payrolls and future openings. But corporate explanations are often very vague. AI is rarely the sole reason companies cite when taking layoffs, with most still pointing to wider corporate restructuring or macroeconomic headwinds. Some executives have also suggested that, while they're making cuts to move around resources now, AI and its demand could open up new roles down the road. Still, it's hard to know if that's the real driver or just the message a business wants to tell Wall Street. Regardless, here are some companies that have announced layoffs recently while at least nodding to the role of AI along the way. On Wednesday, Cisco Systems announced plans to cut under 4,000 jobs, or about 5% of its workforce. The announcement arrived the same day the tech giant unveiled record revenue for its third fiscal quarter, amid soaring demand for its AI tools and infrastructure. CEO Chunk Robbins told employees in a memo that "the companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment" -- and that meant "making hard decisions." But he said Cisco would also help employees impacted by the cuts find new opportunities, "whether internal or external." Financial services provider Block in February moved to lay off more than 4,000 of its 10,000 plus employees. And the parent of payment platforms like Square and Cash App was vocal about reconfiguring to capitalize on AI. "The core thesis is simple. Intelligence tools have changed what it means to build and run a company," CEO Jack Dorsey said in a letter to shareholders at the time. "A significantly smaller team, using the tools we're building, can do more and do it better." Not only tech companies have pointed to AI when initiating layoffs. In January, chemicals maker Dow, Inc. announced plans to cut about 4,500 jobs -- as part of broader push to "streamline" operations. That included putting more emphasis on AI and automation. Also in January, Pinterest said it would lay off under 15% of its workforce as the company pivots more of its money to AI. The image-sharing platform said the cuts were part of broader "transformation initiatives" -- which included reallocating the company's resources to AI-focused roles and prioritizing AI-powered products. Last fall, Lufthansa Group said it would shed 4,000 jobs by 2030 -- pointing to the adoption of AI, digitalization and consolidating work among member airlines. While perhaps not explicitly mentioning or tying the technology to recent layoff announcements, a host of other big names -- including Meta, Microsoft and Amazon -- are also cutting thousands of jobs while investing billions of dollars toward AI. Meta, for example, plans to lay off about 8,000 workers, or about 10% of its workforce, starting next week. When announcing the cuts last month, the Facebook owner more broadly cited the need to offset certain investments and broader efficiency. Still, the move arrives as Meta continues to ramp up spending on AI infrastructure and highly-paid AI expert hires. And earlier this year, CEO Mark Zuckerberg said 2026 will be when, "AI starts to dramatically change the way that we work."

'We are making clear, strategic investments': Cisco cuts 4,000 jobs, even as AI orders surge

* Cisco will be making 4,000 workers redundant very soon * Last quarter the company posted a "record" 12% growth in revenue * Investors seem happy with revenue growth and the future outlook Cisco has confirmed it will be laying off around 4,000 workers, representing 5% of its global headcount, as part of an ongoing restructuring effort to focus on AI, silicon, optics and security. Company CEO Chuck Robbins announced the plans in a post praising the firm's "record" revenue growth of 12%, declaring that "Our Path Forward" must include some job losses along the way. Rather than being purely a cost-cutting exercise, or a response to AI-enhanced productivity rendering some human workers irrelevant, Robbins stressed the job cuts would fuel a company restructure, giving it the "focus, urgency, and the discipline" to tackle high-growth areas. Cisco cuts 4,000 jobs The company added that it will continue hiring in high-growth areas like AI infrastructure, silicon development, optics and fiber networking, cybersecurity and the internal deployment of AI and automation, even though 5% of its workers would be affected in this series of layoffs. Cisco confirmed $15.84 billion in revenue, up 12% year-over-year in its results - but most notably, networking orders grew by more than 50% and data center switching orders rose over 40%. To date this fiscal year, Cisco has also secured $5.3 billion in AI infrastructure orders from hyperscalers. "We will provide support in finding new opportunities, whether internal or external, through Cisco's placement services," Robbins added, boasting that the program has seen a 75% success rate in next role discovery. Despite the considerable loss, investors seemed pleased with Cisco's reaction to market trends and its restructuring effort to focus on high-growth areas, with shares rising over 20% since yesterday's announcement. It's also a trend we're seeing across the entire industry, with companies like Meta, IBM and Salesforce also blaming redundancies on shifting priorities. While this is a shift from previously blamed pre-pandemic overhiring and AI-induced efficiency gains, it's still disappointing news for the 108,000 tech workers affected this calendar year alone (via layoffs.fyi). Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds.

Why Cisco is axing a fifth of its workforce even as AI demand ramps up

As CEO Chuck Robbins talked about another strong strong AI-driven quarter for Cisco, up to 4,000 of the firm's staffers, five percent of the total workforce, are about to join the growing ranks of the tech sector's AI-enabled unemployed. Robbins told Cisco employees in a memo that the firm is re-structuring parts of the business to focus more heavily on AI-related opportunities and infrastructure demand. The lay-offs could cost the firm a charge of around $1 billion, according to a regulatory filing, but Robbins emphasized in his communique that the decision had been made based to position the firm better for future growth: 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. Cisco has taken $5.3 billion in AI infrastructure orders from hyperscalers so far this fiscal year. As a result it's now raised its its full-year order estimate to $9 billion, up from the previously predicted $5 billion. Robbins made no reference to the lay-offs in a post-earnings call with analysts - the numbers were good, so no-one on Wall Street was interested in talking about redundancies, so no-one asked him about them - although CFO Mark Patterson did briefly remark: This was really not a savings-driven re-structure. Things are moving incredibly fast right now, and this is more re-aligning from an already strong base as you're seeing in our financials, but really re-aligning resources around silicon, optics, security and AI, and so being able to move fast. We don't always have the exact resources that we need going forward in the right places, and so that's really what this is about versus savings. The firm turned in Q3 2026 numbers showing revenues up 12% year-on-year to $15.8 billion, with net income of $3.4 billion, up 35% on the $2.5 billion reported for the comparable last year quarter. Commenting on the results and AI's impact, Robbins said: We see continued expansion of a focus on AI in the enterprise. We see customers now preparing for inferencing and agentic applications. And in those cases, the network is incredibly important and moving the bits around with low latency is super important and customers are realizing that they have to modernize. That's why we saw our enterprise data center switching business up over 40% in orders for the quarter. And that's just pure enterprise build-out. So we see that accelerating. A recent development for Cisco is its participation in Project Glasswing, the AI cybersecurity initiative launched by Anthropic last month, at the core of which is Claude Mythos Preview, which is making a lot of people very nervous. Robbins expanded on this involvement and the opportunities it might present: First and foremost, we're using it meaningfully to test our own code. I think you're just going to see us accelerate patches and things of that nature out to our customers, so that's all positive. From a business implication perspective, I think there will clearly be security implications for us, and I think there could be opportunities for us for sure. As we talk to customers today, and I've talked to so many of them over the last few weeks since this has become public, there's a lot of concern, obviously, about unpatched technology in their infrastructure, not just ours. And there's a particular focus on last day of support equipment or equipment that's past the last day of support and that technology that can't be patched. So I actually think while there will be a security opportunity, there's going to most likely be a lot of focus from our customers on modernizing their infrastructure so that they don't have this risk from technology that just can't be patched because it's well past last day of support. But that's all to come, he emphasizes: There's really no Mythos-driven orders. There may have been one or two from a customer who decided to do it, and they were already planning on it, Mythos pushed them over the edge, but I don't think we had any meaningful orders in Q3 as a result of Mythos. But that could change in the future as we continue to work with customers. It's a sign of the times that plans to axe a fifth of the workforce from a major tech provider don't really raise an eyebrow these days. We're all numb to this now perhaps, unless, of course, you're a Cisco employee this morning waiting to find out if the 'black spot' is about to be stuck on you. In a closing message clearly aimed at investors, Robbins said: Our innovation pipeline is accelerating and our latest offerings across the portfolio are seeing some of the fastest adoption in our history. This is translating to broad-based record high demand for our technology, which has never been more relevant to customers than it is in the AI era. This combination as well as the outstanding execution by our teams is driving record results and delivering value to our shareholders. The Q3 numbers are good, the AI-driven opportunities are still growing, and the Cisco faithful, overall, has reason to gather for Cisco Live in Las Vegas in a couple of weeks in good cheer.

Cisco layoffs today: Tech giant slashes thousands of jobs as CEO touts record revenue and urgent focus on AI

On Wednesday, Cisco Systems announced impressive quarterly earnings alongside nearly 4,000 job cuts. The dichotomy stemmed from the hardware and networking company's embrace of a rapidly growing trend in tech: openly admitting that layoffs are due to AI adoption rather than poor performance. "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," Cisco CEO Chuck Robbins told employees in a publicly shared email. "I'm confident Cisco will be one of those winners. This means making hard decisions -- about where we invest, how we're organized, and how our cost structure reflects the opportunity in front of us." With his announcement, Robbins follows in the footsteps of tech leaders including Block CEO Jack Dorsey and Snap CEO Evan Spiegel, who made similar moves this year.

Rising AI demand helps Cisco to another earnings and revenue beat - SiliconANGLE

Rising AI demand helps Cisco to another earnings and revenue beat Shares of the networking giant Cisco Systems Inc. soared 20% in extended trading today after it reported solid third-quarter earnings and revenue numbers and announced a new round of job cuts. The company said it's going to cut less than 4,000 jobs, representing less than 5% of its total workforce. Cisco's results were hardly stellar, although they did come in ahead of expectations. The company delivered adjusted earnings of $1.06 per share, coming in just ahead of Wall Street's target of $1.04 per share. Revenue for the period rose 12% from a year earlier to $15.84 billion, compared to the Street's target of $15.56 billion. On the other hand, Cisco's overall profitability improved quite a bit. The company reported net income for the quarter of $3.37 billion, up from a profit of just $2.49 billion in the same period one year earlier. Looking to the fourth quarter, Cisco said it's anticipating earnings of between $1.16 and $1.18 per share on sales of between $16.7 billion and $16.9 billion. Those numbers suggest an even better quarter lies ahead, with Wall Street targeting four-quarter earnings of just $1.07 on $15.82 billion in sales. Cisco Chief Executive Chuck Robbins (pictured) told analysts on a conference call that the company has so far received $5.3 billion worth of orders for artificial intelligence infrastructure and from hyperscalers so far this year. For the full year, it's expecting that total to exceed $9 billion, he added, up from an initial target of just $5 billion. The company also expects $4 billion in total revenue this year from that market, up from an earlier projection of just $3 billion. Although Cisco struggled to gain much momentum earlier on in the AI race, the company's story has gotten some legs in recent months, pushing its stock to a record high late last year, finally surpassing its dot-com era high. This year, the company's stock has continued to rise, gaining more than 32% so far, more than double the 14% gain of the broader Nasdaq index. In a blog post published today to coincide with the earnings results, Robbins said that the latest round of job cuts would begin the very next day. It's the latest in a growing number of technology companies to announce job reductions that have been pinned on the rising adoption of AI. "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," Robbins wrote. "I'm confident Cisco will be one of those winners. This means making hard decisions -- about where we invest, how we're organized, and how our cost structure reflects the opportunity in front of us." The layoffs announced by Cisco add to the growing number of job cuts in the technology sector this year. According to the website Layoffs.fi, the industry has now slashed 103,571 jobs so far this year, approaching the 124,201 figure it reported for all of last year. In its filing, Cisco said costs such as severance pay for terminated employees will result in pre-tax charges of around $1 billion, with $450 million of that set to be recognized in the fourth quarter. During the quarter, Cisco announced a number of new switches and routers based on its next-generation network processor, as well as a new Universal Quantum Switch, which is designed for quantum computing systems. It also closed on a couple of major acquisitions, buying the Israeli cybersecurity firm Astrix Security Ltd. in a deal valued at close to $300 million, and the AI-native observability startup Galileo Technologies Inc. Both acquisitions were made to enhance Cisco's "agentic" security offerings, the company said. Cisco will hope that the acquisitions can ignite new growth in its security division, for revenue was flat in the prior quarter at just below $2 billion, in-line with the Street's consensus estimate of $1.99 billion. The networking segment was the real growth driver, with revenue there up 25% to $8.82 billion, exceeding the Street's $8.47 billion forecast.

Cisco Lays Off Thousands Despite Strong Earnings. The Reason Will Sound Familiar

Following a strong earnings report, Cisco Systems has announced that it will be laying off nearly 4,000 employees, looking to shift towards AI. The technology conglomerate will join multiple big tech names that have been adopting AI into their infrastructure and restructuring around it. The new layoffs at the company will represent less than 5% of the company's global workforce. During its earnings call for the company's third quarter, the company revealed that revenue hit a record $15.8 billion, compared with $15.56 billion expected. "Cisco delivered record quarterly revenue in Q3, and we saw very strong, broad-based demand for our products, demonstrating the relevance of our technology for connecting and securing AI," said Chuck Robbins, chair and CEO of Cisco. "Cisco is well-positioned as the critical infrastructure for the AI era, building on our technology leadership and customer trust, while innovating at the speed and scale that our dynamic world demands." AI Adoption Year-over-year revenue growth for the company reached 12%, rising from $14.15 billion in the same quarter last year, which ended around April 26. According to Cisco, the company has secured $5.3 billion in AI infrastructure orders and is expecting to generate about $9 billion in FY202.

Cisco Is Cutting Staff to Prioritize AI Investments as Data Center Orders Surge. The Stock is Soaring

Get personalized, AI-powered answers built on 27+ years of trusted expertise. Cisco's stock keeps hitting new highs as AI orders surge. Shares of Cisco (CSCO) were up 15% in recent trading, setting a new record topping yesterday's high, a day after the networking giant posted earnings that beat estimates and announced layoffs to support its investments in AI. Cisco said Wednesday that it will restructure "to invest in key growth opportunities including silicon, optics, security and AI," and that it would lead to about $1 billion in one-time charges for severance and other costs. Cisco CEO Chuck Robbins said the cuts would impact "fewer than 4,000 jobs, representing less than 5 percent of our total employee base." As of its latest annual report last July, Cisco had 86,200 total employees. Cisco reported fiscal third-quarter revenue of $15.84 billion and adjusted earnings of $1.06 per share, both ahead of analysts' estimates compiled by Visible Alpha. Cisco said it expects fourth-quarter revenue to come in between $16.7 billion to $16.9 billion, with adjusted earnings per share of $1.16 to $1.18, well above what analysts had projected. Analysts from JPMorgan and Morgan Stanley lifted their price targets to $120, while UBS analysts hiked theirs to $132 following the results, suggesting they still see room for Cisco's stock to rise from its recent level around $116. The JPMorgan analysts said that Cisco's years of investment in its supply chain leaves the company "in much better control of their destiny" than peers relying on other suppliers for some components. With Thursday's gains, Cisco shares are up more than 50% since the start of the year.

Cisco to cut about 4,000 jobs in AI-focused restructuring as orders surge - The Economic Times

Cisco announced nearly 4,000 job cuts as part of a strategic restructuring to boost investment in AI and growth areas. The networking giant also raised its annual revenue forecast, driven by a significant surge in hyperscaler orders for AI infrastructure, leading to a substantial stock increase.Cisco said on Wednesday it would cut nearly 4,000 jobs, as part of a restructuring aimed at shifting investment toward artificial intelligence and related growth areas, and raised its annual revenue forecast after a surge in hyperscaler orders. Shares of the San Jose, California-based networking equipment maker rose more than 16% in extended trading. "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," CEO Chuck Robbins said in a post on Cisco's website. The company said it was making strategic investments in silicon, optics, security and employees' use of AI across the company, as it reduces roles in some areas. Cisco has taken $5.3 billion in AI infrastructure orders from hyperscalers so far this fiscal year, and raised its full-year order expectation to $9 billion ⁠from $5 billion previously. "Though much will likely be made about a slight decrease in headcount, the post-market move we are seeing is truly the result of hyperscaler capex spilling ⁠downstream. This move validates that this capex is about more than just chips," said Ryan Lee, Direxion's senior vice president of product and strategy. Cisco is benefiting as companies expand spending beyond AI processors to the high-speed networks required to connect large data-centre systems. Its networking product orders grew more than 50% in the third quarter compared to a year earlier, while data-centre switching orders rose more than 40%. Shares of the company have risen 32% this year. On a post-earnings call, Cisco's finance chief, Mark Patterson, said it is "reasonable" to expect at least $6 billion of revenue on the AI hyperscale side in fiscal 2027. The company reported revenue of $15.84 billion for the third quarter ended ⁠April 25, beating analysts' average estimate of $15.56 billion, according to data compiled by LSEG. It now expects fiscal 2026 revenue in the range of $62.8 billion to $63 billion, compared with its earlier forecast of $61.2 billion to $61.7 billion. Cisco will reduce its workforce by fewer than 4,000 jobs in the fourth quarter, representing less than 5% of its workforce. It had about 86,200 employees as of July 26. The restructuring plan is expected to cost Cisco up to $1 billion, with about $450 million to be recognised in the fourth quarter and the remainder in fiscal 2027.

Cisco Lays Off 4,000 Employees In AI Overhaul, CFO Mark Patterson Says Move Not 'Savings' Driven But Abou

Cisco Systems (NASDAQ:CSCO) is cutting nearly 4,000 jobs as part of a sweeping restructuring effort designed to accelerate its push into artificial intelligence, security, silicon and networking infrastructure. Cisco Restructuring Focuses On AI, Security And Silicon On Wednesday, the networking giant announced the workforce reduction, framing the move as a strategic repositioning rather than a traditional cost-cutting initiative. Cisco said growing demand from hyperscale cloud customers and AI-related infrastructure is driving the need to redirect investments toward faster-growing business segments. During the company's third-quarter earnings call, CFO Mark Patterson noted that the restructuring is intended to improve execution speed in critical growth markets. "This was really not a savings-driven restructure," Patterson said. "[It's] really realigning resources around silicon, optics, security and AI." He added that rapid technological shifts are forcing Cisco to ensure talent and investments are concentrated in the right areas to stay competitive. Chuck Robbins Says AI Era Requires Urgency Earlier during the announcement, CEO Chuck Robbins reinforced that message, describing the layoffs as part of a broader transformation strategy aimed at long-term value creation. "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," Robbins said. Cisco Raises Revenue Outlook Amid Hyperscaler Demand Cisco posted third-quarter revenue of $15.84 billion, topping analyst estimates of $15.56 billion, while adjusted earnings of $1.06 per share beat expectations of $1.03. For the fiscal fourth quarter, Cisco forecast revenue of $16.7 billion to $16.9 billion, above estimates of $15.82 billion and adjusted earnings of $1.16 to $1.18 per share, ahead of projections of $1.07 per share. The company also raised its full-year revenue guidance to $62.8 billion to $63 billion, up from its previous outlook of $61.2 billion to $61.7 billion and above analyst expectations of $61.6 billion. Price Action: On Wednesday, Cisco Systems shares jumped 19.8% to $122 in after-hours trading after closing the regular session up 2.6% at $101.87, according to Benzinga Pro. According to Benzinga Edge Rankings, CSCO ranks in the 85th percentile for Momentum, driven by solid performance across short, medium and long-term time frames. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo: PJ McDonnell / Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Cisco To Cut Nearly 4,000 Jobs In Restructuring Push Around AI, Security

The networking giant announced thousands of layoffs as part of a restructuring move aimed at helping shift resources to continue its investments in strategic areas as advanced AI, security, and quantum networking technology, the company said during its third fiscal quarter 2026 financial analyst conference call. Cisco Wednesday said it is initiating a corporate restructuring that will result in layoffs of less than 4,000 of its employees. Cisco Chair and CEO Chuck Robbins, in his prepared remarks for financial analysts during the company's fiscal third quarter 2026 quarterly conference call, unveiled the restructuring plan aimed at focusing resources on strategic areas. "To ensure we are capturing the significant opportunities in silicon, optics, security, and AI, we announced a restructuring plan today to reallocate resources and allow us to invest in these key growth areas," Robbins said. "These actions are building from a position of strength and focusing on the technologies that will accelerate our growth deliver unmatched innovation to customers and partners and define our future." [Related: Cisco Reinstates Compute Deal Registration; Partners Cheer Reversal] Robbins, in a blog posted Wednesday afternoon on Cisco's website, wrote that the IT industry is facing a complex environment, and that companies looking to grow need to shift investment towards those areas with strong demand and long-term value creation. "This means making hard decisions - about where we invest, how we're organized, and how our cost structure reflects the opportunity in front of us," he wrote. "With this, 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. Most notifications will begin on May 14 and continue globally in alignment with applicable local laws and regulations." At the same time, Robbins wrote, Cisco is making other strategic investments to grow the company. "While we are reducing roles in some areas, we are making clear, strategic investments - particularly in silicon, optics, security, and in our employees' use of AI across the company," he said. "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." In a regulatory filing, Cisco said it will recognize pre-tax charges to its GAAP financial results of up to $1 billion consisting of severance and other one-time termination benefits, and other costs. The company said it expects to recognize approximately $450 million of these charges in the fourth quarter of fiscal 2026 with the remaining amount expected to be recognized during fiscal 2027. A restructuring at Cisco is certainly a concern, said Lane Irvine, director of strategic alliances at Long View Systems, a Calgary, Alberta-based solution provider and Cisco channel partner. "As you look at a lot of the tech companies doing restructuring, AI is having an impact on how they manage their business and how they reduce costs," Irvine told CRN. "Certainly the public markets are putting the biggest pressure probably on that, as opposed to driving profitability." It is also absolutely a concern for partners, Irvine said. "Cisco is definitely one of the top partners in how they support the channel and the work we do," he said "But they're definitely kind of moving more towards the mainstream where there is less support and there is a higher expectation for partners to execute on the customer onboarding, customer support, and customer success components. They're pushing more of that responsibility to the partners. It's something we've got to watch carefully." Cisco has a lot of competitive pressures in the market right now with other vendors stepping up in their specific areas, Irvine said. "Cisco's got a really strong end-to-end story, but they've got to make sure they're able to stay competitive from a price perspective," he said. "And to do that, of course they have to reduce their overhead costs. There's obviously two sides to it. We're certainly cautious on the partner side and partner support. But we're definitely looking forward to some price decreases that will create a more competitive environment for Cisco." Cisco continues to invest in strategic opportunities such as AI, Robbins said. For instance, he said Cisco earlier this week said it is open sourcing the Foundry Security Spec, a production-grade blueprint for building scalable agentic security evaluation systems using both available and new AI models. "We are providing this blueprint to customers to accelerate their ability to take advantage of agentic AI and stay ahead of adversaries," he said. Cisco IQ, the company's unified AI-powered delivery engine for Cisco services, is now generally available with more than 250 customers already onboarded, Robbins said. "Cisco IQ provides customers with a real-time benchmark view of Cisco assets and configurations in their environment, helping to future-proof it against emerging architectural threats," he said. Cisco is also accelerating AI advancements internally for its teams, Robbins said. "CIRCUIT, our proprietary AI assistant, is now fully embedded in how Cisco operates, with near universal adoption across our employee base and over 8 million total quarterly interactions. CIRCUIT leverages a network of advanced third-party AI models, automatically choosing the best engine for every task, or letting users make that choice. As a founding design partner with OpenAI on Codex, our engineers have been using it from the beginning, and as of this week we have made Codex available to our entire product organization to enable them to build tools and reimagine new products at unprecedented speed." Cisco has also made progress in the area of quantum networking, Robbins said. "We recently introduced a working research prototype of the Cisco Universal Quantum Switch designed to route and preserve quantum information between systems at room temperature and over standard telecom fiber," he said. "By building this infrastructure now, we are helping to accelerate the entire quantum ecosystem that will power the data centers of the future." For its third fiscal quarter 2026, which ended April 25, Cisco reported total revenue of $15.84 billion, up 11.9 percent over the $14.15 billion the company reported for its third fiscal quarter 2025. That included product revenue of $12.12 billion, up from last year's $10.37 billion, and services revenue of $3.74 billion, down from $3.78 billion. On the product side, networking accounted for $8.82 billion in revenue, up 25 percent; security for $2.01 billion, flat over last year; collaboration for $1.02 billion, down 1 percent, and observability for $269 million, up 3 percent. Cisco's Americas business accounted for $9.60 billion, up 14 percent year-over-year. Cisco also reported GAAP net income of $3.37 billion or 85 cents per share, up significantly from last year's $2.49 billion or 62 cents per share. On a non-GAAP basis, Cisco reported net income of $4.23 billion or $1.06 per share, up from last year's $3.83 billion or 96 cents per share. That beat analyst expectations by 2 cents per share, according to Seeking Alpha.

Cisco jumps on strong revenue forecast, AI push with job cuts

Cisco Systems shares jumped 19 per cent in premarket trading on Thursday, a day after it outlined nearly 4,000 job cuts and raised revenue forecast on strong hyperscaler demand, boosting investor confidence in its AI infrastructure push. If the gains hold, the networking gear maker's stock would be on track for a record high, adding about US$75 billion to its market value at current price levels of $120.98. The restructuring, expected to cost $1 billion, is aimed at shifting investments toward AI and related growth avenues, Cisco said on Wednesday. The job cuts, planned for the fourth quarter, represent less than five per cent of its workforce. Cisco, whose shares have gained about 32 per cent this year, said it was strategically investing in silicon, optics, security as well as employees' use of AI across-company and reducing roles in some areas. "Cisco feels a lot like Intel here, as the puck has gone to where CEO Chuck Robbins invested -- rewarding the company for its custom silicon and optics," said analysts at Melius Research. The firm has taken $5.3 billion in AI infrastructure orders from hyperscalers so far this fiscal year and raised its full-year order expectation to $9 billion from $5 billion previously. The San Jose, California-based company supplies high-speed networking equipment, such as switches and routers, that data centers use to run AI. "We think this networking momentum can continue as this space has a clear secular tailwind from AI inference," Melius added. Last month, Cisco unveiled switches designed to connect different types of quantum computers, advancing its push toward a network of quantum machines, in line with efforts by peers such as Alphabet's Google GOOGL.O and IBM IBM.N. Cisco trades at a forward price-to-earnings ratio of 22.77, compared with Arista Networks' 35.64 and Hewlett Packard Enterprise Co HPE.N 12.37.

Cisco jumps on strong revenue forecast, AI push with job cuts

May 14 - Cisco Systems shares jumped 19% in premarket trading on Thursday, a day after it outlined nearly 4,000 job cuts and raised revenue forecast on strong hyperscaler demand, boosting investor confidence in its AI infrastructure push. If the gains hold, the networking gear maker's stock would be on track for a record high, adding about $75 billion to its market value at current price levels of $120.98. The restructuring, expected to cost $1 billion, is aimed at shifting investments toward AI and related growth avenues, Cisco said on Wednesday. The job cuts, planned for the fourth quarter, represent less than 5% of its workforce. Cisco, whose shares have gained about 32% this year, said it was strategically investing in silicon, optics, security as well as employees' use of AI across-company and reducing roles in some areas. "Cisco feels a lot like Intel here, as the puck has gone to where CEO Chuck Robbins invested -- rewarding the company for its custom silicon and optics," said analysts at Melius Research. The firm has taken $5.3 billion in AI infrastructure orders from hyperscalers so far this fiscal year and raised its full-year order expectation to $9 billion from $5 billion previously. The San Jose, California-based company supplies high-speed networking equipment, such as switches and routers, that data centers use to run AI. "We think this networking momentum can continue as this space has a clear secular tailwind from AI inference," Melius added. Last month, Cisco unveiled switches designed to connect different types of quantum computers, advancing its push toward a network of quantum machines, in line with efforts by peers such as Alphabet's Google and IBM. Cisco trades at a forward price-to-earnings ratio of 22.77, compared with Arista Networks' 35.64 and Hewlett Packard Enterprise Co 12.37. (Reporting by Kanishka Ajmera in Bengaluru; Editing by Joyjeet Das)

Cisco buoyed by surge in AI-related orders

Cisco reported quarterly results and guidance that topped Wall Street expectations, driven by a sharp acceleration in orders for artificial intelligence infrastructure. The US group posted revenue of $15.84bn for the quarter ended April 25, compared with $15.56bn expected by analysts according to LSEG. Adjusted EPS reached $1.06, also beating forecasts. Following the release, the stock jumped 15% in after-hours trading. Quarterly revenue rose 12% y-o-y, while net income reached $3.37bn compared to $2.49bn a year earlier. For Q4, Cisco forecasts adjusted EPS of between $1.16 and $1.18 and revenue of $16.7bn to $16.9bn, both levels exceeding market expectations. The group said it has already booked $5.3bn in orders from hyperscalers and AI infrastructure providers this year. Cisco raised its annual target for AI-related orders to $9bn, up from a previous $5bn, and now expects $4bn in revenue from this segment. Long perceived as lagging in the AI data center race, the group is now benefiting from renewed investor interest. During the quarter, Cisco also introduced new switches and routers powered by its next-generation network processors. Revenue from its networking business surged 25% to $8.82bn, while cybersecurity revenue remained stable at around $2bn.

Cisco to Cut Jobs in Shift to Capture More AI Demand

Cisco Systems is cutting jobs as part of a shift toward high-growth parts of its business, including AI infrastructure. The networking company said Wednesday that it is launching a restructuring that will cost up to $1 billion in severance, one-time termination benefits and other costs. The plan will allow Cisco to invest in growth opportunities around silicon, optics, security and AI, the company said. The overhaul was announced in tandem with Cisco's latest quarterly earnings report, in which is raised full-year guidance on the back of strong revenue and earnings. The San Jose, Calif., company now expects $62.8 billion to $63.0 billion of revenue for the current fiscal year, which ends in late July. That's up from a previous forecast for $61.2 billion to $61.7 billion. Earnings are now expected to reach $3.16 to $3.21 a share for the current fiscal year, up from the $3.00 to $3.08 previously projected, Cisco said. Adjusted earnings are forecasted to reach $4.27 to $4.29 a share, up from a prior forecast of $4.13 to $4.17. For the fiscal third quarter that ended April 25, revenue rose 12% to $15.84 billion. That beat analyst estimates for revenue of $15.56 billion, according to a survey by FactSet, and topped its own guidance from February for up to $15.60 billion. Cisco logged a third-quarter profit of $3.37 billion, or 85 cents a share, up from $2.49 billion, or 62 cents a share, in the same quarter a year earlier. Adjusted earnings were $1.06 a share, beating the $1.03 cents forecast of analysts surveyed by FactSet. The rose 13% to $114.80 in aftermarket trading following the results.