Cisco announced on Wednesday that it will cut fewer than 4,000 jobs, or less than 5% of its workforce, as it reshapes the company around artificial intelligence (AI), silicon, optics and security. Cisco’s business is growing; the company reported Q3 revenue of $15.8 billion, increased its full-year revenue forecast, and said AI infrastructure orders from hyperscalers have reached $5.3 billion so far this fiscal year.
Cisco said the reductions will take place in the fourth quarter and are part of a restructuring designed to move investment toward higher-growth areas.
The company estimated the restructuring will cost up to $1 billion, including about $450 million in the 4th quarter and the rest in fiscal 2027.
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Cisco had about 86,200 employees as of July 26, 2025, so the reduction is significant even if it stays below the 5% mark.
Cisco’s own earnings note said Q3 revenue rose 12% year over year to $15.8 billion, with networking revenue up 25% and strong demand in the Americas, EMEA and APJC regions. The company expects fiscal 2026 revenue of $62.8 billion to $63 billion, above its earlier range.
Why Cisco is cutting jobs when business is growing
The logic is structural, not cyclical; Cisco is moving capital and headcount toward the parts of the business tied to AI infrastructure: silicon, optics, security and the networking gear needed to connect large data center systems. Cisco has taken $5.3 billion in AI infrastructure orders from hyperscalers so far this year and now expects $9 billion for the complete fiscal year, up from an earlier estimate of $5 billion.
AI build-out is not only about chips; it also requires switches, routers, and optical systems that keep large clusters of servers moving data fast enough to train and run models. Cisco’s third-quarter networking product orders rose more than 50% year over year, while data-center switching orders increased more than 40%. In other words, the company is cutting some roles to fund the parts of the business that it believes will matter most in the next phase of AI spending.
The wider wave of layoffs
The tech industry has spent much of 2026 adjusting staffing to match a new AI-driven cost structure. Amazon confirmed 16,000 corporate job cuts, completing a plan for around 30,000 since October. Amazon said the reductions were meant to reduce bureaucracy and improve the company.
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Meta is also moving in the same direction, Meta planned a first wave of layoffs affecting about 10% of its workforce, or close to 8,000 employees, with more cuts possible later in the year as it pours hundreds of billions of dollars into AI.
Block cut more than 4,000 jobs in February as part of a sweeping AI overhaul. Freshworks said in May that it would cut 11% of its workforce, or about 500 jobs, as AI continued to reshape the software market. These are different companies with different products, but the pattern is the same: management teams are trimming headcount while shifting resources toward automation, AI tooling and infrastructure.
AI is changing where enterprise spending goes, how companies organize teams, and what work can be done with fewer people. Cisco’s chief executive framed the move as a shift toward the areas where “demand and long-term value creation are strongest,” while the company’s finance chief said it was reasonable to expect at least $6 billion in AI hyperscale revenue in fiscal 2027.
The job cuts show that growth is being redirected, not evenly shared across the organization. That is an important distinction for investors, employees and customers alike.
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Cisco’s move adds to a growing body of evidence that AI is already reshaping corporate workforce trends. The near-term effect is not a simple story of machines replacing workers everywhere. It is more specific: companies are reducing roles that no longer fit the new operating model, while increasing investment in infrastructure, security and AI-enabled systems.
