Cisco Slashes 4,000 Jobs Amid Record Revenue and AI Push, CEO Robbins Explains Strategy

Cisco Systems announced record quarterly earnings alongside nearly 4,000 job cuts on Wednesday, framing the layoffs as a strategic shift toward AI adoption rather than a reflection of poor performance.

In a publicly shared email to employees, Cisco CEO Chuck Robbins stated,

"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. I’m confident Cisco will be one of those winners. This means making hard decisions—about where we invest, how we’re organized, and how our cost structure reflects the opportunity in front of us."

Robbins’ announcement aligns with similar moves by other tech leaders this year, including Block CEO Jack Dorsey and Snap CEO Evan Spiegel. He also emphasized that the company will further invest in employees’ AI integration across roles.

Employees affected by the layoffs will begin receiving notifications on Thursday. Cisco confirmed that the cuts represent less than 5% of its total workforce.

Shares of Cisco Systems Inc. (Nasdaq: CSCO) surged over 16% in early trading on Thursday, following record highs earlier in the month.

Cisco’s Q3 Financial Performance

For the quarter ending April 25, Cisco reported:

• $15.8 billion in revenue, a 12% year-over-year increase and exceeding Wall Street’s estimate of $15.56 billion.
• $1.06 adjusted earnings per share, surpassing the expected $1.04.

During a post-earnings call, Robbins highlighted Cisco’s AI-centric partnerships, including Nexus and Nvidia, and noted significant revenue growth in AI-related products. He cited plans to expand the secure AI factory in collaboration with Nvidia.

Product revenue rose 17%, driven by "robust demand for our AI infrastructure and campus networking solutions," Robbins said.

Future Outlook

Cisco provided the following revenue guidance:

• Q4 2025: $16.7 billion to $16.9 billion
• Fiscal Year 2026: $62.8 billion to $63 billion

For comparison, Cisco reported $56.7 billion in revenue for fiscal year 2025.