Cisco Cuts 4,000 Jobs for AI Pivot While Posting Record $15.8B Quarterly Revenue

Record Revenue, Same-Day Layoffs

Cisco announced on May 14 that it plans to reduce its global headcount by nearly 4,000 positions—under 5% of its workforce—as part of a strategic realignment toward silicon, optics, security, and AI. The announcement came on the same day the company reported record quarterly revenue of $15.8 billion, a 12% year-on-year increase.

Strategic Reallocation, Not Cost-Cutting

Cisco CFO Mark Patterson told analysts the restructuring was not a savings-driven exercise, calling it a rapid reallocation of resources toward AI and cybersecurity. The company has secured $5.3 billion in AI infrastructure orders from hyperscalers so far this fiscal year, and has raised its full-year AI order forecast from $5 billion to approximately $9 billion.

Affected employees are being offered severance packages, extended training resources, and job placement assistance. An internal program has reportedly helped about 75% of participants secure new roles.

Market Reaction

Cisco shares jumped roughly 20% in after-hours trading. Restructuring charges could reach $1 billion, with about $450 million expected in Q4 of fiscal 2026 and the remainder in fiscal 2027.

Broader Pattern

Cisco's move illustrates a widening trend: even companies posting record results are restructuring headcount to redirect capital toward AI infrastructure. Growth-driven restructuring is becoming standard across the industry.

Source: TechCrunch