‘We’re making clear, strategic investments’: Cisco cuts 4,000 jobs, even as AI orders surge

Cisco will soon lay off 4,000 employees
In the last quarter, the company recorded a “record” growth of 12% in its turnover.
Investors seem happy with revenue growth and future prospects

Cisco confirmed it will lay off about 4,000 workers, or 5% of its global workforce, as part of an ongoing restructuring effort to focus on AI, silicon, optics and security.

The company’s CEO, Chuck Robbins, announced the plans in an article praising the company’s “record” revenue growth of 12 percent, saying “Our path forward” must include job losses along the way.

Rather than simply being a cost-cutting exercise or a response to AI-enhanced productivity rendering some human workers unnecessary, Robbins emphasized that the job cuts would fuel a restructuring of the company, giving it the “focus, urgency and discipline” needed to tackle high-growth areas.

Cisco cuts 4,000 jobs

The company added that it would continue to hire in high-growth areas like AI infrastructure, silicon development, optical and fiber networks, cybersecurity, and internal deployment of AI and automation, even though 5% of its employees would be affected by this round of layoffs.

Cisco confirmed revenue of $15.84 billion, up 12% year over year, but more importantly, networking orders were up more than 50% and data center switching orders were up more than 40%. So far this fiscal year, Cisco has also secured $5.3 billion in AI infrastructure orders from hyperscalers.

“We will provide assistance in finding new opportunities, whether internal or external, through Cisco Placement Services,” Robbins added, boasting that the program has seen a 75% success rate in the next job discovery.

Despite the sizable loss, investors appeared pleased with Cisco’s response to market trends and its restructuring efforts to focus on high-growth areas, with shares up more than 20% since yesterday’s announcement.

This is also a trend we’re seeing across the industry, with companies like Meta, IBM, and Salesforce also attributing layoffs to changing priorities. While this is a change from pre-pandemic overhiring and AI-driven efficiency gains, it remains disappointing news for the 108,000 tech workers affected this calendar year alone (via layoffs.fyi).

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