Cisco Cuts Jobs as AI Revenue and Stock Surge

Cisco is making a major shift toward artificial intelligence, even as it reports some of its strongest financial results in years. The networking technology giant announced that it is cutting nearly 4,000 jobs, representing less than 5% of its workforce, while also reporting record quarterly revenue and stronger-than-expected earnings. The move shows how major tech companies are increasingly restructuring around AI, even when their overall business performance remains strong.

Cisco said the job cuts are part of a broader effort to change its cost structure and redirect spending toward AI, cybersecurity, silicon, optics, and other growth areas. CEO Chuck Robbins told employees that companies that succeed in the AI era will need focus, urgency, and the discipline to keep shifting investments toward areas with the strongest long-term value. He also said Cisco wants to invest more in how employees use AI across the company, suggesting that AI will become a bigger part of its internal operations as well as its products and services.

The layoffs come at a time when Cisco is benefiting from the rapid growth of AI infrastructure. The company plays an important role in supplying networking equipment such as switches and routers, which are needed for data centers that support AI systems. Cisco has already received $5.3 billion in AI infrastructure orders from hyperscalers this fiscal year and raised its full-year expectation for those orders to $9 billion, up from a previous forecast of $5 billion. This growing demand has helped Cisco become one of the major winners from Big Tech’s spending on AI.

Investors responded strongly to Cisco’s results and AI strategy. Cisco shares jumped around 17% to a record high, putting the stock on track for its biggest single-day gain in more than two decades. The company’s market value, which was close to $400 billion, was expected to rise by about $70 billion if the rally continued. Analysts at Melius Research said Cisco is being rewarded for Robbins’ investments in custom silicon and optics, which are becoming more important as AI data centers expand.

Cisco’s latest earnings also gave investors confidence. For the quarter ending April 25, the company reported $15.8 billion in revenue, a 12% increase from the same period last year and higher than Wall Street expectations. Its adjusted earnings reached $1.06 per share, also beating forecasts. Product revenue rose 17%, which Robbins connected to strong demand for AI infrastructure and campus networking solutions. Cisco also raised its annual revenue forecast and now expects fourth-quarter revenue between $16.7 billion and $16.9 billion, with fiscal 2026 revenue expected to reach between $62.8 billion and $63 billion.

While Cisco is gaining momentum from AI, the company is also facing pressure to strengthen its cybersecurity business. It has dealt with several vulnerabilities in routers and firewalls that allowed hackers to break into customer networks, including networks connected to the U.S. government. Cisco also experienced a data breach last year that affected customer personal information. The company’s decision reflects a larger trend across the technology industry, with companies such as Cloudflare, General Motors, Block, and Snap also making job cuts while pointing to AI investment, automation, or shifting priorities. Cisco’s situation stands out because the layoffs are happening alongside record revenue, strong stock performance, and rising AI demand, showing how AI growth can bring both major business opportunity and difficult workforce changes.

Works Cited

Ajmera, Kanishka. “Cisco Shares Hit Record on Strong Forecast, AI Push with Job Cuts.” CTV News, 14 May 2026, www.ctvnews.ca/business/article/cisco-jumps-on-strong-revenue-forecast-ai-push-with-job-cuts/. 

Fielding, Sarah. “Cisco Layoffs Today: Tech Giant Slashes Thousands of Jobs as CEO Touts Record Revenue and Urgent Focus on AI.” Fast Company, 14 May 2026, www.fastcompany.com/91542378/cisco-layoffs-today-jobs-slashed-stock-soars-ceo-embraces-ai. 

Whittaker, Zack. “Cisco Cuts Nearly 4,000 Jobs to Spend More on AI, Reports ‘Record Quarterly Revenue.’” TechCrunch, 14 May 2026, www.techcrunch.com/2026/05/14/cisco-cuts-nearly-4000-jobs-to-spend-more-on-ai-reports-record-quarterly-revenue/. 

“Cisco Systems Inc.” Britannica Money, Encyclopaedia Britannica, www.britannica.com/money/Cisco-Systems-Inc. 

“Cisco Gives Tepid Annual Forecast, Renewing Fears of Slowdown.” Bloomberg, 16 Aug. 2023, www.bloomberg.com/news/articles/2023-08-16/cisco-gives-tepid-annual-forecast-renewing-fears-of-slowdown.