Cisco slashes fewer than 4,000 roles amid record $15.8 billion revenue
Chief Executive Chuck Robbins and CFO Mark Patterson clarify that the cuts, effective May 14, are a strategic realignment rather than a cost-saving measure, as the company pivots resources toward silicon, optics, and security.
Cisco has announced a reduction of its workforce by fewer than 4,000 employees, representing less than 5 per cent of its total base, effective from May 14. The announcement coincides with the release of fiscal Q3 2026 earnings, which reported record revenue of $15.8 billion, marking a 12 per cent year-on-year increase. Chief Executive Chuck Robbins and Chief Financial Officer Mark Patterson clarified that the cuts are not driven by cost savings but by a need to reallocate resources toward silicon, optics, security, and artificial intelligence infrastructure.
Robbins stated that companies winning in the AI era must demonstrate the discipline to shift investment toward areas of strongest demand and long-term value creation. The company expects to recognise up to $1 billion in pre-tax charges related to the restructuring, with $450 million recognised in Q4 FY ’26 and the remainder in FY ’27. These funds are intended to support the strategic pivot rather than serve as a general cost reduction.
During an investor call, Patterson emphasised that the move was not a savings-driven restructure. He noted that the rapid pace of change in the AI era requires Cisco to realign resources from an already strong financial base. The company sold $5.3 billion in AI infrastructure to hyperscalers so far this fiscal year and has raised its full-year AI infrastructure order guidance to $9 billion, up from $5 billion, with revenue guidance increased to $4 billion from $3 billion.
Affected employees will receive pro-rated payments of their fiscal 2026 bonuses. Cisco is also offering one year of access to all Cisco U courses and certifications, covering AI, security, and networking, alongside placement services for external job searches. Robbins highlighted that the company’s placement program has previously helped 75 per cent of participants find their next role, whether internal or external.
This restructuring follows previous workforce reductions in February 2024, where 4,245 employees were dismissed, and August 2024, when approximately 6,000 roles were cut. Both prior rounds were attributed to similar strategic shifts around AI and security. The current notifications will begin on May 14 and continue globally in alignment with applicable local laws and regulations.
