Cisco to Cut Nearly 4,000 Jobs Even as AI Orders Drive Record Revenue

Cisco Systems plans to eliminate nearly 4,000 jobs, just under 5% of its workforce, days after reporting record fiscal third-quarter revenue of $15.8 billion, up 12% year over year. The contradiction is the point: chief executive Chuck Robbins is reallocating headcount, not shrinking the company.

AI infrastructure orders from hyperscalers reached $1.9 billion in the quarter, more than triple year-ago levels, and Cisco raised its full-year AI order forecast to roughly $9 billion. Five of the world's largest cloud buyers each posted triple-digit order growth, lifting shares to an intraday record near $119.

A focus tax

Robbins framed the layoffs as a focus tax, telling employees Cisco will "shift investment toward the areas where demand and long-term value creation are strongest." Those areas, executives said, are silicon (Cisco's in-house Silicon One platform), optics, security and AI-native networking software.

The cuts highlight a pattern emerging across infrastructure vendors in 2026: even with AI tailwinds, leaders are using layoffs to fund silicon roadmaps rather than to defend margins. Robbins put it bluntly on the call: companies without their own silicon "are going to struggle to be relevant to the hyperscalers."