Cisco to cut about 4,000 jobs in AI-focused restructuring as orders surge

Cisco, the San Jose, California-based networking equipment maker, revealed on Wednesday it will reduce its workforce by fewer than 4,000 jobs as part of a restructuring to prioritize artificial intelligence and related growth areas. The company reported $15.84 billion in revenue for its third quarter ending April 25, exceeding analyst expectations of $15.56 billion, and raised its full-year revenue forecast to $62.8 billion to $63 billion for fiscal 2026, up from $61.2 billion to $61.7 billion. The job cuts, representing less than 5% of its 86,200-strong workforce, will occur in the fourth quarter, with the restructuring expected to cost up to $1 billion. Cisco cited a surge in AI infrastructure orders from hyperscalers, totaling $5.3 billion this fiscal year, and raised its full-year order expectation to $9 billion from $5 billion. CEO Chuck Robbins stated that the company will focus on areas with strong demand and long-term value, such as silicon, optics, security, and AI integration across operations. Shares of Cisco rose over 16% in extended trading after the announcement, reflecting investor confidence in the company’s AI-driven growth strategy. Finance chief Mark Patterson noted that at least $6 billion in revenue from AI hyperscale projects is expected in fiscal 2027. The company’s networking product orders grew more than 50% in the third quarter compared to the same period last year, while data-center switching orders rose over 40%, highlighting increased spending on high-speed networks required for AI systems. Cisco attributed its success to expanding investments beyond AI processors, emphasizing the need for robust connectivity infrastructure. The restructuring plan aims to reallocate resources toward high-growth areas while reducing roles in less strategic segments. Analyst Ryan Lee from Direxion suggested that the company’s strong performance validates broader AI-related capital expenditures beyond chip manufacturing.