Cisco Systems has announced another round of layoffs affecting fewer than 4,000 employees, even as the company posted record quarterly revenue of $15.8 billion, underscoring how major technology firms are reshaping operations around artificial intelligence priorities.
According to a memo from Chief Executive Officer Chuck Robbins, published on Wednesday and cited by SFGATE, the San Jose-headquartered company will reduce less than 5% of its workforce. Employees are expected to begin receiving notifications from Thursday.
Robbins said Cisco would support affected workers in finding new opportunities following the restructuring.
The move marks the latest workforce reduction at a major technology company as businesses continue reallocating investment towards AI infrastructure, software and long-term growth areas.
AI strategy drives restructuring plans
In the internal memo, Robbins linked the restructuring directly to Cisco’s evolving investment priorities in 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,” Robbins wrote, according to SFGATE.
He added that the company needed to make “hard decisions” around investment allocation, organisational structure and costs as it positions itself for future growth.
Despite the layoffs, Cisco reported strong financial performance in its latest third-quarter results.
Key figures include:
- Record quarterly revenue of $15.8 billion
- Billions of dollars in profit during the period
- Workforce reduction affecting fewer than 4,000 employees
- Layoffs representing less than 5% of total staff
Cisco did not disclose which departments or business units would be affected by the cuts.
Restructuring expected to cost $1 billion
Cisco’s restructuring programme is expected to generate significant costs over the next two fiscal years.
According to a filing with the US Securities and Exchange Commission, the company expects the restructuring effort, including severance and termination-related expenses, to cost approximately $1 billion.
The filing stated:
- Around $450 million of the expense is expected in the fourth quarter of fiscal 2026
- The remaining charges are projected to be incurred during 2027
SFGATE reported that California’s Employment Development Department had not received a WARN notice from Cisco as of Wednesday. Such filings are generally required in cases involving large-scale layoffs.
Job cuts continue across the technology sector
The latest cuts extend a pattern that has emerged across the technology industry, where companies are reducing headcount despite healthy revenues and rising investor optimism around AI.
Cisco itself has carried out previous workforce reductions alongside strong earnings performance. SFGATE noted that about 221 Bay Area employees were laid off in August after the company reported strong revenue growth.
The broader sector has also seen multiple companies announce job cuts tied to AI-focused restructuring efforts.
Last week, cryptocurrency exchange Coinbase said it planned to reduce approximately 14% of its workforce, or about 700 employees, as part of efforts to prioritise AI investments.
Technology companies are increasingly balancing aggressive spending on AI capabilities with tighter operational structures, creating a paradox where strong financial performance coexists with continued workforce reductions.
Cisco’s latest announcement signals that even established and profitable enterprise technology firms are continuing to reshape staffing models as competition intensifies in the AI race.