Cisco cuts 4,000 roles to fund AI and silicon shift despite record quarter
Restructuring follows Q3 2026 revenue of $15.8 billion as company prioritises security, optics and artificial intelligence infrastructure.
Cisco has announced the reduction of fewer than 4,000 roles, representing less than 5% of its global workforce, as part of a strategic restructuring to reallocate resources toward artificial intelligence, security, silicon, and optics. The move follows a record third quarter of fiscal year 2026, with revenue rising 12% year-on-year to $15.8 billion. CEO Chuck Robbins stated the action is a proactive response to the speed of market changes rather than a reaction to weak demand.
The restructuring is designed to fund areas the company identifies as critical for future growth. During the company’s earnings release, Robbins emphasised that these investments are being built from a position of strength to accelerate growth and deliver innovation. He noted that the company is making hard decisions regarding its cost structure to reflect the opportunity in front of it, ensuring the organisation is positioned for the next phase of the technology cycle.
Cisco reported GAAP net income of $3.4 billion for Q3 2026, a 35% increase year-on-year, with GAAP earnings per share rising 37% to 85 cents. Total product orders rose 35% year-on-year, while networking product orders grew by more than 50%. The company secured $1.9 billion in AI orders during the quarter, with a balanced mix between Silicon One-based networking systems and optics.
Robbins clarified in a CNBC interview that he does not want AI to be used as an excuse for the cuts, emphasising that the primary driver is the need for funding in silicon and optics. He acknowledged that impacted employees may perceive the move as cost reallocation rather than cost reduction, but noted that reallocated funds will create new jobs within the company that affected staff could potentially fill.
Notifications for the job cuts are scheduled to begin on May 14 and will continue globally, subject to local laws and regulations. Affected employees will receive prorated fiscal year 2026 bonuses, one year of access to Cisco U courses and certifications, and support through company placement services. The story was originally published by TheStreet on May 16, 2026.
