Cisco layoffs: Tech giant cuts 4,000 jobs to fund growing AI ambitions

Cisco is restructuring its workforce by cutting nearly 4,000 jobs—less than 5% of its total employees—to redirect spending toward artificial intelligence and future growth areas. The move, announced alongside strong quarterly results, includes $1 billion in pre-tax charges, with $450 million recognized in the current fiscal quarter. CEO Chuck Robbins emphasized the need to prioritize investments in high-demand sectors like AI, where agility and decisive decisions are critical. The company reported revenue of $15.84 billion for the quarter ending April 25, exceeding analyst expectations of $15.56 billion. Adjusted earnings per share reached $1.06, slightly above consensus estimates. Cisco’s networking division drove growth, with revenue jumping 25% year-over-year to $8.82 billion, fueled by demand for AI infrastructure and new cybersecurity-focused products. Cisco raised its annual AI-related revenue forecast to $4 billion from $3 billion and its AI infrastructure orders projection to $9 billion from $5 billion, citing $5.3 billion in orders already secured this year. The company’s focus on hyperscalers and AI-powered networking hardware aligns with broader industry trends, where firms are shifting budgets toward AI-driven operations. Shares surged over 16% in extended trading, marking Cisco’s largest single-day rally since 2002. Despite entering the AI market later than some competitors, investors now view the company as essential for networking infrastructure supporting global AI expansion. The layoffs reflect Cisco’s strategic pivot, balancing workforce reductions with aggressive AI investments to capitalize on long-term growth opportunities.