Cisco to cut 4,000 jobs as AI demand drives growth outlook

Cisco is cutting fewer than 4,000 jobs even as surging AI demand is lifting its growth outlook, a sharp illustration of how the biggest tech names are using artificial intelligence to justify both expansion and austerity at the same time. The company said the reductions amount to less than 5% of its workforce and that most layoff notices would begin on May 14, while Cisco shares jumped about 17% in extended trading after results and guidance topped Wall Street’s expectations.

The numbers behind the move were strong. For the fiscal third quarter ended April 25, Cisco reported revenue of $15.8 billion, up 12% from a year earlier, adjusted earnings of $1.06 a share, and net income of $3.37 billion, up from $2.49 billion. The company also raised its fiscal 2026 revenue forecast to $62.8 billion to $63.0 billion from $61.2 billion to $61.7 billion, and guided fourth-quarter revenue to $16.7 billion to $16.9 billion. Cisco said total product orders rose 35% year over year, or 19% excluding hyperscalers, with networking product orders up more than 50% and data-center switching orders up more than 40%.

The real engine of the turnaround is AI infrastructure. Cisco said it had already booked $5.3 billion in AI infrastructure and hyperscaler orders this fiscal year and lifted its full-year order expectation to $9 billion from $5 billion. It also raised its expected AI infrastructure revenue to $4 billion from $3 billion. In prepared remarks, chief executive Chuck Robbins said Cisco is investing in silicon, optics, security and employees’ use of AI across the company, and added that the winners 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.”

The cuts also fit a pattern. Cisco had about 86,200 employees as of July 26, 2025, and it has already gone through two major rounds of layoffs in 2024, including a February reduction of about 4,250 jobs, or 5% of the workforce, and a later restructuring affecting about 7% of staff. This latest charge will cost up to $1 billion, with about $450 million recognized in the fiscal fourth quarter and the rest in fiscal 2027, underscoring that AI-fueled growth is coming with a relentless reordering of the U.S. tech labor market.