Cisco Layoffs 2026: Networking Giant to Cut Nearly 4,000 Jobs to Fund AI Ambitions

Cisco has announced a restructuring plan that will result in the loss of nearly 4,000 jobs, representing just under 5% of its global workforce. The networking giant confirmed the reductions alongside stronger than expected quarterly results, as it pivots its resources toward artificial intelligence (AI) and high-growth business segments. Despite the layoffs, the company raised its annual revenue forecast following a surge in orders for the hardware required to power AI systems.

Cisco Layoffs and Restructuring Costs

The latest round of job cuts is expected to result in roughly USD 1 billion in pre-tax charges, primarily driven by severance payments and related expenses. Cisco expects to recognise approximately USD 450 million of these charges during the current fiscal quarter, with the remainder extending into fiscal 2027. Affected staff began receiving notifications on 14 May, with the process rolling out globally in accordance with local regulations. LinkedIn Layoffs: Microsoft-Owned Professional Network To Lay Off 5% of Global Workforce Despite Revenue Growth.

Chief executive Chuck Robbins stated that the company must reallocate investments toward areas where long-term value creation is strongest. Impacted employees will be eligible for pro-rated bonuses for the 2026 financial year, severance support, and access to the company’s placement services. Additionally, Cisco is providing one year of access to its certification courses to help departing staff gain new skills in fields such as security and networking.

AI Infrastructure Orders Drive Upbeat Outlook

The restructuring comes at a time of significant financial growth for the firm. Cisco reported revenue of USD 15.84 billion for the quarter ending 25 April, surpassing analyst predictions of USD 15.56 billion. The company’s networking division saw a 25% year-on-year jump in revenue, reaching USD 8.82 billion, supported by the launch of new switches and routers powered by next-generation processors.

Cisco has already received USD 5.3 billion in AI infrastructure and hyperscaler orders this year, leading it to increase its annual target for AI-related orders to USD 9 billion. Its projected AI-related revenue forecast has also been adjusted upwards to USD 4 billion from an earlier estimate of USD 3 billion. These figures triggered a 16% rally in Cisco shares in extended trading, reflecting investor confidence in its role as a critical supplier for the global AI expansion.

Broader Industry Shift Toward AI Priorities

The decision to reduce headcount while reporting strong earnings mirrors a broader trend across the technology industry. Cybersecurity firm Cloudflare recently announced a similar move, cutting over 1,100 roles to fund AI-driven restructuring. Robbins noted that winning in the AI era requires the discipline to continuously shift investment away from legacy operations and toward data centres and AI-focused software. Tech Layoffs 2026: Over 1 Lakh Employees Fired by Meta, Amazon, Microsoft and Other Giants in First 5 Months of the Year.

While Cisco was a later entrant to the AI hardware race compared to some data-centre rivals, its recent performance suggests it is successfully reinventing itself. The company plans to continue hiring in strategic segments, specifically in silicon and optical technologies, to support its internal transformation into an AI-native organisation.

(The above story first appeared on LatestLY on May 14, 2026 09:33 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).