Cisco Systems will eliminate up to 4,000 positions globally beginning May 14, 2026, representing roughly 5% of its total workforce. CEO Chuck Robbins attributed the restructuring to shifting market conditions, including intensifying competition and a global shortage of components needed to support the company's product portfolio and customer AI deployments. The layoffs will proceed according to local labor laws in each country, with affected employees receiving pro-rated fiscal year 2026 bonuses and access to placement services.
The workforce reduction comes as Cisco redirects resources toward strategic priorities including silicon development, optical technologies, security solutions, and enterprise AI adoption. The company plans to maintain investment in these areas while streamlining operations elsewhere. Cisco will provide impacted employees with one year of complimentary access to Cisco U training programs covering AI, security, and networking certifications. The company's internal placement program has historically helped 75% of participants secure new positions either within Cisco or at external organizations.
Despite the planned cuts, Cisco reported robust third-quarter fiscal 2026 financial results that exceeded guidance. Revenue reached $15.8 billion, a 12% increase year-over-year, while net income rose 35% to $3.4 billion. Product orders surged 35% overall and more than 50% in networking specifically. The company highlighted particularly strong performance in AI infrastructure, reporting $5.3 billion in related orders year-to-date and raising its full-year AI infrastructure revenue forecast from $3 billion to $4 billion.
Cisco's data center switching orders increased more than 40% year-over-year, and the company identified a multi-year campus networking refresh cycle with orders up over 25%. Regional performance showed double-digit growth in the Americas (14%) and high single-digit growth in both EMEA and APJC regions (9% each). Operating margins expanded across both GAAP and non-GAAP measures, with non-GAAP operating margin reaching 34.2%.
For the full fiscal year 2026, Cisco projects total revenue between $62.8 billion and $63.0 billion. The company declared a quarterly dividend of $0.42 per share payable July 22, 2026. Organizations using Cisco infrastructure should monitor for potential service delivery changes during the transition period, though the company emphasized that the restructuring aims to strengthen its competitive position in AI and security markets rather than signal financial distress.
Source: https://www.techmonitor.ai/news/cisco-to-reduce-workforce-by-4000-prioritises-ai-and-security