Record revenues and better-than-expected profits provide no guarantees against layoffs in 2026, with Cisco announcing job cuts across its operations. Adding to the many rounds of tech layoffs committed in the name of AI, Cisco is making changes to its workforce, reducing its headcount by about 5% this month. This is expected to affect 4,000 jobs across the organization and unfold globally. If this sounds familiar, the company similarly laid off 4,000 workers back in February 2024, after quarterly reports indicated a 5% decline in earnings. While Cisco is gearing up for “important, impactful, and consequential work ahead,” it appears that a large number of its workers will no longer be part of the equation of making it happen.
Cisco layoffs for Q4 2026 were just announced despite record revenue growth, with plans for additional investments in AI. (Image: Freepik)
Cisco Layoffs in Q4 Directed Towards Making the Company “One of the Winners” of the AI Era
On Wednesday, Cisco revealed that it was set to cut nearly 4,000 jobs globally as part of a larger restructuring to shift its resources towards artificial intelligence in preparation for the upcoming era of AI. In an email to employees, which was also shared on the company website, the company detailed its Q3 FY26 earnings, showcasing record revenue of $15.8 billion, up 12% year-over-year, and double-digit top and bottom-line growth.
Acknowledging the impressive results despite the rapidly changing market and growing competition, Cisco CEO Chuck Robbins added that “The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest.” This statement is set to reshape the future direction of the organization, rewriting how the company invests, organizes, and maintains its cost structure.
According to IndexBox, the company has secured $5.3 billion in AI infrastructure orders from hyperscalers this fiscal year, and expects approximately $9 billion in AI orders for the full fiscal year of 2026. This could allow revenue from this wing to reach $4 billion, surpassing previous projections of $3 billion. As is evident, the company has identified its strength in the AI segment and plans to double down further on its growth.
How Is Cisco Planning Its Workforce Changes for 2026?
Cisco’s announcement focused more on its plans for its AI push as opposed to detailing the layoffs that were set to occur. Apart from announcing that less than 5% of its workforce would be affected, the company did not provide additional details on the roles that would be targeted and the reasoning behind the employee selections that would be made. Employees affected by the job cuts received emails from Cisco on May 14, and many will likely continue to hear more over the next few days.
For employees who remain, the company has announced a meeting on May 21 to discuss what happens next. Cisco also highlighted plans to continue making investments in operations to accelerate its growth, centring more largely on silicon, optics, security, and employee use of AI across the company.
The tech company did not share all the details of the severance packages being offered to affected employees, but they are expected to receive pro-rated payment of FY26 bonuses, as well as support with finding work through its placement services, either at the organization or outside of it. As part of its “continued personalized learning,” Cisco employees will also retain access to one year of all Cisco U courses and certifications, which cover aspects like AI, Security, Networking, etc.
Chuck Robbins’ Memo Suggests that Sometimes, Growth for One Does Not Mean Growth for All
The workforce changes at Cisco alter the general understanding of how organizational success trickles down to the rest of the workforce. The older ethos of united growth is no longer applicable to the workplace. When layoffs accompany revenue growth, it suggests that companies are willing to divest resources towards the money makers and away from the workforce that keeps the entirety of the organization operational. With messaging like this, it can be challenging to maintain employee spirits and enthusiasm for the role consistently.
While there is considerable growth on offer and room for the business to grow across operations and services, it is important that organizations also make an effort to keep their workforces motivated to perform. Without any reassurances that additional layoffs will not follow soon enough, such pressures leave the workforce experiencing undue strain. As Cisco’s AI push solidifies, all eyes are on how it manages the workforce cuts in the coming weeks.
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