Cisco cuts 4,000 jobs to pivot to AI and cybersecurity amid record revenue

Cisco has announced a restructuring plan to reduce its workforce by fewer than 4,000 employees, representing approximately 5 per cent of its staff. The move is designed to restructure costs and redirect capital towards artificial intelligence and cybersecurity initiatives. The announcement coincides with the company reporting record quarterly revenue and double-digit growth for its fiscal third quarter, highlighting a divergence between strong financial performance and workforce reduction.

Chief Executive Chuck Robbins highlighted the company’s financial strength while acknowledging the strategic shift towards AI. In a blog post, Robbins touted the company’s record revenue and noted strategic investments in employees’ use of AI across the organisation. The decision aligns with a broader trend in the technology sector, where firms such as Cloudflare and General Motors have recently cited AI spending priorities as justification for layoffs despite reporting robust financial results.

Market reaction to the announcement was swift and positive. Cisco shares soared more than 15 per cent in premarket trading following the release of the restructuring plan and a revised fiscal fourth-quarter revenue outlook. The company now projects revenue between $US16.7 billion and $US16.9 billion for the quarter, significantly exceeding Wall Street expectations of roughly $US15.8 billion.

The strategic pivot comes as Cisco addresses significant security challenges. The company is currently contending with ongoing security vulnerabilities in its routers and firewalls, which have previously allowed hackers to breach the networks of corporate customers, including the U.S. government. Additionally, the firm experienced a data breach last year that affected customers’ personal information, underscoring the urgency of its increased focus on cybersecurity.

This restructuring marks the latest in a series of workforce reductions at Cisco. The company laid off thousands of employees during two separate rounds in 2024 and cut 150 jobs in 2025. While Robbins was slated to earn more than $US52 million in executive compensation during 2025 according to public filings, a Cisco spokesperson did not return a request for comment regarding whether the chief executive plans to reduce his own compensation.