Restructuring for AI: Cisco lays off about 4,000 employees
Cisco has announced layoffs that will affect about 4,000 employees, which is less than 5% of its staff.
Cisco has announced layoffs that will affect about 4,000 employees, which is less than 5% of its staff.
Cisco is cutting “fewer than 4,000 jobs,” according to an internal memo from CEO Chuck Robbins released Wednesday. The networking giant is restructuring its business to focus on artificial intelligence, Business Insider reports .
The layoffs will affect less than 5% of Cisco's workforce. It comes as the company reported better-than-expected quarterly results and raised its sales forecast on growing demand for AI infrastructure.
Cisco said the restructuring will cost the company up to $1 billion, mostly due to severance costs. The company expects to record about $450 million of these costs in the current quarter and the rest during fiscal 2027.
The company's shares jumped more than 17% in over-the-counter trading.
Cisco is redirecting investments to areas “where demand and long-term value creation are highest,” including AI chip manufacturing, fiber optics, and cybersecurity.
The company said it plans to continue hiring in strategically important areas while cutting some positions as part of an AI-related restructuring.
Cisco joins a growing list of tech companies linking layoffs to AI-related efficiency gains and broader organizational changes. LinkedIn and Cloudflare announced layoffs in May, and Snap in April.
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