Cisco said on Thursday it would cut around 4,000 jobs as part of a restructuring aimed at enhancing its AI efforts.
“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, ” CEO Chuck Robbins said in a post on Cisco’s website. The company said it was making strategic investments in silicon, optics, security and employees’; use of AI across the company, as it reduces roles in some areas.
Robbins mentioned that the reductions amount to less than 5% of Cisco’s workforce. Most notifications are expected to begin Thursday and continue globally, he added.
Cisco did not mention how many jobs would be eliminated in San Jose, the Bay Area or California. The company had announced the cuts after it reported its highest-ever quarterly revenue: $15.8 billion, up 12% from a year earlier.
Cisco also said that demand is growing from large cloud and internet companies that are spending heavily on AI data centers. It had reportedly received $5.3 billion in AI-related infrastructure orders so far and now expects that total to reach about $9 billion by the end of the fiscal year, far above its earlier forecast of $5 billion.
Cisco said in a securities filing that the plan could cost up to $1 billion before taxes, mostly for severance and other payments to departing employees. About $450 million of those costs are expected this quarter, with the rest coming in fiscal 2027.
“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,” Robbins wrote in his message to employees.
According to its most recent report, Cisco had about 86,200 employees as of July 26, 2025.
These layoffs are among the many that occurred in the tech industry recently as companies shift spending towards AI and automation. Investors seem to be focused on such a transition—as seen with Cisco’s own results, which indicated networking product orders rose more than 50% year over year in the quarter, and data center switching orders grew more than 40%.
Other companies that recently conducted layoffs include LinkedIn which cut employees from multiple divisions, GitLab which also announced layoffs amid major AI overhaul.