Cisco could cut nearly 4,000 jobs as it restructures its business to put more money into artificial intelligence and other growth areas, according to an internal memo from CEO Chuck Robbins and related disclosures.
In the memo, Robbins said Cisco plans to reduce its workforce by "fewer than 4,000 jobs" in the fourth quarter of its 2026 fiscal year, which the company said is less than 5% of its global staff.
The cuts are part of a restructuring program designed to "continuously shift investment" toward AI infrastructure, security, and other high-demand segments, he wrote. Robbins told employees the company will keep hiring in what it considers strategic roles while it removes positions in slower-growing or overlapping parts of the organization, according to Business Insider.
Cisco announced the planned job reductions on the same day it reported record third-quarter results and raised its full-year revenue forecast. The networking company posted what it described as record quarterly revenue and better-than-expected profit, helped by strong demand from cloud providers and other customers building AI-driven data centers.
The company said orders tied to AI projects were a major contributor and that the restructuring is intended to align its spending with those opportunities rather than to respond to weak demand.
According to a summary of the memo and company statements, Cisco is prioritizing investment in silicon, optics, security products, and tools that allow employees and customers to use AI more effectively, Channel News Asia reported.
Robbins wrote that the company wants its cost structure to match areas "where demand and long-term value creation are strongest," explicitly naming AI as a key focus. Cisco said it will continue to back its core networking portfolio while shifting more resources to technologies used in modern AI data centers.
The restructuring is expected to carry a pretax charge of up to about $1 billion, largely related to severance and associated costs, according to regulatory and earnings disclosures. Cisco said it expects to record around $450 million of those charges in the current quarter, with the rest to be recognized in its 2027 fiscal year.
The company said affected employees will be notified starting in mid-May and will receive severance packages and transition support, in line with local laws in different countries where it operates, as per Yahoo Finance.
Originally published on vcpost.com
