Cisco to cut thousands of jobs as AI push accelerates after earnings beat

Cisco Systems announced plans to eliminate nearly 4,000 jobs, less than 5% of its global workforce, as it refocuses on artificial intelligence, security, and networking. The decision follows a record Q3 FY2026 earnings report, where revenue hit $15.8 billion—exceeding expectations of $15.56 billion—and adjusted earnings per share reached $1.06, surpassing the $1.04 forecast. The layoffs mark a strategic pivot to prioritize high-growth areas, with Cisco targeting $9 billion in AI-related orders for FY2026, up from a prior estimate of $5 billion. Year-to-date, the company has already secured $5.3 billion in AI infrastructure orders from hyperscalers. Workforce notifications will begin May 14, with affected employees receiving severance, extended training, and job placement support through Cisco’s internal and external programs. Despite the job cuts, Cisco’s stock rose roughly 20% in after-hours trading following the earnings beat. The restructuring plan, including severance and related costs, is expected to result in pre-tax charges of up to $1 billion, with $450 million recognized in the following quarter and the remainder in FY2027. The company reported year-over-year revenue growth of 12%, rising from $14.15 billion in the same quarter last year. Cisco CEO Chuck Robbins stated confidence in the company’s AI strategy, emphasizing the need for hard decisions to position Cisco as a leader in the AI era. The company’s internal placement services program has reportedly helped 75% of participants secure new roles, underscoring its commitment to supporting affected employees during the transition.