Cisco said on Wednesday it would cut nearly 4,000 jobs as part of a restructuring aimed at shifting investment to artificial intelligence (AI) and related growth areas, while raising its annual revenue forecast after a surge in hyperscaler orders, Reuters reported.
“Companies that will win in the era of artificial intelligence will be those that focus, find, and discipline to continually shift investment to areas where demand and long-term value creation are strongest,” Cisco chief executive Chuck Robbins said in a post on Cisco’s website.
Cisco shares rose more than 16% in extended trading, Reuters reported.
According to a report, the San Jose, Calif.-based networking equipment maker said the layoffs will affect less than 5% of its global workforce and are expected to occur during the fourth quarter of fiscal 2026. Cisco will cut fewer than 4,000 jobs in the fourth quarter, representing less than 5% of its workforce. The company had around 86,200 employees as of July 26.
Reuters reported that Cisco is making strategic investments in silicon, optics, security and the use of artificial intelligence by employees across the company, while reducing roles in some areas.
The latest move follows earlier layoffs that Cisco has announced over the past two years as the company streamlines operations and prioritizes high-growth businesses, including AI, cybersecurity and cloud networking. In 2024, Cisco announced a restructuring that affected thousands of employees as it sought to improve operational efficiency amid waning demand for some of its traditional networking products.
Hyperscaler demand raises outlook
Reuters reported that Cisco has secured $5.3 billion in AI infrastructure orders from hyperscalers so far this fiscal year and raised its full-year forecast for AI orders to $9 billion from earlier estimates of $5 billion.
The company also raised its fiscal 2026 revenue forecast to $62.8 billion to $63 billion, up from previous estimates of $61.2 billion to $61.7 billion. Third-quarter revenue rose 12% year-over-year to $15.84 billion, driven by strong demand for networking equipment connected to AI data centers and the expansion of cloud infrastructure.
“While much will likely be made of the slight downsizing, the post-launch shift we’re seeing is really the result of hyperscaler capex spillovers downstream. This move confirms that this capex isn’t just about the chips,” Ryan Lee told Reuters.
The restructuring plan is expected to cost Cisco up to $1 billion, with about $450 million recognized in the fourth quarter and the rest in fiscal 2027, according to Reuters.
Cisco is among several technology companies increasing investment in AI infrastructure and automation.
