Cisco is cutting its workforce by about 4,000 employees worldwide as part of a push toward AI, security, and silicon-based products. The cuts impact about 5% of its around 86,000 employees. The restructuring is aimed at moving resources away from slower-growing areas and into businesses tied to AI and next-generation networking. Importantly, the decision comes even after strong results in Q3 fiscal 2026, where Cisco posted record revenue of about $15.8 billion, marking about 12% year-over-year growth.
The restructuring shows a broader transformation in Cisco’s business model. The company is increasingly focused on becoming a core infrastructure provider for the AI era, particularly through high-speed networking systems, data center switching, and optical technologies that support large-scale AI model training and deployment. Demand from hyperscale cloud providers has become a major growth driver, with Cisco reporting about $5.3 billion in AI infrastructure orders year-to-date, and projecting this figure to reach around $9 billion for the full fiscal year.
Along with AI infrastructure, cybersecurity remains a main pillar of Cisco’s strategy. As enterprise environments become more distributed and AI-driven systems introduce new security challenges, the firm is investing heavily in integrated security platforms designed to protect both traditional networks and AI-enabled architectures. At the same time, Cisco is accelerating development in custom silicon and advanced hardware design, aiming to reduce reliance on third-party components and optimize performance for AI-scale workloads.
Financially, the restructuring is expected to cost up to $1 billion, primarily due to severance expenses and organizational changes. A portion of this cost will be recognized immediately, while the remainder will extend into fiscal 2027.
“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% of participants discover their next role,” Chuck Robbins (CEO, Cisco) noted.
The development becomes notable as Cisco Systems simultaneously delivered a strong Q3 FY2026 performance, highlighting a clear contrast between operational strength and workforce restructuring. The company reported record quarterly revenue of about $15.8 billion, marking a 12% year-over-year increase, while adjusted earnings per share came in at around $1.06, both beating market expectations. Growth was spread across its networking portfolio, with product orders rising around 35%, and networking revenue showing strong momentum driven by demand from AI-linked infrastructure deployments. Meanwhile, the firm also lifted its full-year revenue guidance to about $62.8-$63 billion.
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Ashutosh is a Senior Writer at The Tech Portal, largely reporting on new tech, and intersection of technology and business. Ashutosh’s career spans across nearly a decade of technology writing across multiple platforms and languages.
