Cisco has announced plans to eliminate fewer than 4,000 positions globally as part of a strategic restructuring aimed at redirecting investment toward artificial intelligence (AI), cybersecurity, and other high-growth technology segments. The cuts, disclosed on 14 May 2025 alongside the company's third-quarter FY26 earnings, will affect less than 5 per cent of Cisco's global workforce.

What the Restructuring Covers

Chief Executive Officer Chuck Robbins and the Executive Leadership Team outlined the decision in an internal memo, framing it as a deliberate pivot rather than a distress move. '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,' Robbins said in the memo.

Affected employees will begin receiving notifications from 14 May, with the process being executed globally in compliance with local laws and regulations. Cisco said the rollout is being managed in phases across different geographies.

Support Package for Affected Employees

Cisco confirmed that impacted staff will receive pro-rated FY26 bonuses, severance support, and access to the company's placement services programme. The networking giant noted that the programme had helped nearly 75 per cent of past participants secure new roles. Additionally, affected employees will be granted one year of access to Cisco U courses and certifications spanning AI, cybersecurity, networking, and related technologies — a detail that underscores the company's stated intent to reskill rather than simply exit talent.

Where Cisco Is Doubling Down

Even as it trims headcount in certain divisions, Cisco said it would continue making what it called 'clear, strategic investments' in silicon, optics, security, and the broader deployment of AI across its operations. 'These investments are building from a position of strength and focusing on the technologies and businesses that will accelerate our growth,' the memo stated.

Notably, the restructuring was announced alongside record quarterly revenue of $15.8 billion, up 12 per cent year-on-year — a figure that complicates the conventional narrative around tech layoffs as a sign of financial strain. Cisco also raised its full-year business outlook, citing growing enterprise demand for AI-linked infrastructure and services.

Broader Context: AI Reshaping Big Tech Workforces

Cisco's move is the latest in a series of AI-driven workforce restructurings across global technology companies. Unlike cost-cutting rounds triggered by revenue pressure, this wave is characterised by companies simultaneously reporting strong earnings while shedding roles in legacy divisions. For Cisco specifically, the shift reflects a longer transition from its core networking hardware identity toward software, security, and AI-integrated infrastructure — a journey accelerated by its acquisition of Splunk earlier in 2024. The layoffs signal that integration and focus, not financial distress, are the primary drivers here.

What Comes Next

The company has not specified which divisions or geographies will bear the largest share of the cuts. Industry analysts will watch whether Cisco's AI-segment revenue growth justifies the restructuring costs in subsequent quarters. With enterprise AI spending on an upward trajectory, Cisco's bet appears timed to capture infrastructure demand — but execution on the talent reallocation front will be closely scrutinised.