Cisco is cutting “fewer than 4,000 jobs” as the networking giant restructures its business to focus more heavily on artificial intelligence, according to a memo from CEO Chuck Robbins published Wednesday.
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The layoffs, which affect less than 5% of Cisco’s workforce, come as the company reported stronger-than-expected quarterly results and raised its sales forecast on growing demand for AI infrastructure.
In a regulatory filing on Wednesday, Cisco said the restructuring is expected to cost up to $1 billion, largely due to severance expenses. The company said it expects to record about $450 million of those charges in the current quarter, with the remaining costs carrying into fiscal 2027.
The company’s stock was up more than 17% in after-hours trading.
Cisco joins a growing list of tech companies that have tied layoffs to AI-related efficiencies and broader organizational changes.
In the memo, Robbins said Cisco is shifting investments toward areas “where demand and long-term value creation are strongest,” including AI chips, fiber optics, and security.
The company said it plans to continue hiring in strategic areas while eliminating some roles as part of its AI-related restructuring.
Read the full memo below:
Team,Today we announced our Q3 FY26 earnings with record revenue of $15.8 billion, up 12 percent year over year, and double-digit top and bottom-line growth. The ELT and I could not be prouder of the growth you have all delivered for Cisco.These results are even more impressive given the complex environment we’re operating in — a rapidly changing market, with intensifying competition, and a global shortage of components critical to support our portfolio and the AI buildout from our customers.The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest. I’m confident Cisco will be one of those winners. This means making hard decisions — about where we invest, how we’re organized, and how our cost structure reflects the opportunity in front of us.With this, we are making changes today that will result in the reduction of our overall workforce in Q4 by fewer than 4,000 jobs, representing less than 5 percent of our total employee base. Most notifications will begin on May 14 and continue globally in alignment with applicable local laws and regulations. For employees whose roles are impacted, leaders will share details directly — including timing, available resources, support, and benefits in each country. This will include pro-rated payment of FY26 bonuses to impacted employees. We will provide support in finding new opportunities, whether internal or external, through Cisco’s placement services — a program that has seen 75 percent of participants discover their next role. We are also committed to continued personalized learning and will provide one year of access to all Cisco U courses and certifications, covering AI, Security, Networking, and more.While we are reducing roles in some areas, we are making clear, strategic investments — particularly in silicon, optics, security, and in our employees’ use of AI across the company. These investments are building from a position of strength — and focusing on the technologies and businesses that will accelerate our growth, deliver unmatched innovation to customers and partners, and define our future.To those leaving Cisco, thank you for your contribution, your dedication, and the mark you have made on this company. We are deeply grateful and are committed to handling this transition with the care, clarity, and respect that defines our culture.For those who will continue here, we will discuss these changes and answer questions at the Cisco Beat on May 21 at 8 a.m. PT.We have important, impactful, and consequential work ahead. Your focus, resilience, and leadership are vital to our growth and relevance in FY27 and beyond.Chuck and the Executive Leadership Team
