Cisco said it will cut nearly 4,000 jobs as it shifts more investment toward AI, even as stronger hyperscaler demand pushed the networking equipment maker to raise its annual revenue outlook.
The move comes as Cisco is reallocating spending toward areas it sees as central to AI-era infrastructure, including silicon, optics, security and internal AI adoption, Reuters reported.
Chief Executive Chuck Robbins said companies that lead in AI will be those that move investment quickly toward areas with the strongest demand and long-term value.
The cuts would affect less than 5% of Cisco’s workforce and are expected in the fourth quarter, with the company reporting about 86,200 employees as of July 26.
AI infrastructure demand lifts outlook
Cisco said AI infrastructure orders from hyperscale customers have reached $5.3 billion so far this fiscal year, pushing the company to raise its full-year target to $9 billion from $5 billion as demand accelerates.
The surge reflects growing demand beyond AI chips, as cloud and technology companies spend heavily on the networking systems needed to connect large data-center clusters.
AI demand lifts Cisco forecast
Cisco reported third-quarter revenue of $15.84 billion for the period ended April 25, topping analysts’ average estimate of $15.56 billion. The company now expects fiscal 2026 revenue of $62.8 billion to $63 billion, up from its previous forecast of $61.2 billion to $61.7 billion.
Restructuring costs and shares move higher
Cisco said the restructuring plan will cost up to $1 billion, with about $450 million expected to be recognized in the fourth quarter and the remainder in fiscal 2027.
The restructuring update was still received positively by investors, with stronger AI infrastructure demand sending Cisco shares up more than 16% in extended trading.
AI restructuring spreads across tech
Cisco’s cuts follow a wider wave of AI-driven restructuring across the technology sector, as companies trim roles in some teams while redirecting money and hiring toward automation, data centers and AI products.
Cloudflare recently moved to cut more than 1,100 jobs, or about 20% of its workforce, in a restructuring tied to an AI-driven operating model. Freshworks also said it would eliminate about 500 roles, or 11% of staff, as AI reshapes software work.
This pattern shows how the AI boom is creating demand in some areas while forcing companies to reset headcount elsewhere.