Cisco is cutting circa 4,000 jobs in a restructuring costing up to $1 billion, freeing resources for AI, silicon and security investment after AI orders from hyperscalers surpassed its full-year target early.
Summary:
- Cisco will cut just under than 4,000 jobs, circa 5% of its workforce, in a restructuring costing up to $1 billion in severance and related expenses, to redirect resources toward AI, silicon, optics and security, according to the Wall Street Journal
- AI infrastructure orders from hyperscalers reached $1.9 billion in Q3, against $600 million a year earlier, and have already exceeded Cisco’s $5 billion full-year target with one quarter remaining
- Cisco raised full-year revenue guidance to $62.8-$63 billion and lifted adjusted earnings per share guidance to $4.27-$4.29, with shares climbing 17% in after-hours trading
Cisco Systems is cutting nearly 4,000 jobs and absorbing up to $1 billion in restructuring costs as it redirects resources toward artificial intelligence infrastructure, silicon, optics and security, the company announced alongside a strong set of quarterly results.
Chief Executive Chuck Robbins framed the layoffs, affecting less than 5% of the workforce, as a reallocation rather than a savings exercise, saying the company does not always have the right resources in the right places for where it is heading. Layoff notifications were set to begin on Thursday.
The overhaul comes as Cisco’s AI order book accelerates sharply. Hyperscaler AI infrastructure orders hit $1.9 billion in the fiscal third quarter ended April 25, more than triple the $600 million recorded a year earlier, and year-to-date orders have already surpassed the $5 billion full-year target Cisco had set for fiscal 2026, with one quarter still to go.
Quarterly revenue rose 12% to $15.84 billion, beating analyst estimates, while full-year revenue guidance was lifted to $62.8-$63 billion. Adjusted earnings per share guidance was raised to $4.27-$4.29. Shares jumped 17% in after-hours trading to $119.40.
When you are no longer configured for where the business is heading.
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Cisco’s after-hours share surge of 17% reflects the market’s approval of a restructuring framed as growth investment rather than cost-cutting. The scale of AI infrastructure orders, already exceeding Cisco’s full-year hyperscaler target with a quarter to spare, signals robust enterprise and cloud spending on network and silicon capacity. The move adds to a broader pattern of large-cap tech reallocating headcount toward AI, a trend with implications for labour markets and capital equipment demand alike.
