Cisco Layoffs: US Tech Company to Cut Around 4,000 Employees

US-based company Cisco on Wednesday said it will lay off around 4,000 employees, as part of a restructuring workflow and shifting investment toward artificial intelligence (AI) and related sectors and raised its annual profit forecast after a surge in cloud service.

Cisco CEO Chuck ⁠Robbins said that the company will focus on AI shift, urgency and discipline to shift investment toward the areas where demand and long-term value creation are strongest. They said it will make strategic investments in silicon, ​optics, security and employees' use of AI across the company, as it reduces roles in some areas.

Cisco bought AI infrastructure for $5.3 billion from cloud service providers so far this financial year 202627. The company raised its full-year order expectations to $9 billion from $5 billion previously.

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"Though much will likely be made about a slight decrease in headcount, the post-market move we are seeing ​is truly the result of hyperscaler capex spilling downstream. This move validates that this capex is about ​more than just chips," said Ryan Lee, Direxion's senior vice president of product and strategy.

Cisco is benefiting as companies expand ‌spending beyond ⁠AI processors to the high-speed networks required to connect large data-centre systems. Its networking product orders grew more than 50% in the third quarter compared to a year earlier, while data-centre switching orders rose more than 40%.

Cisco will reduce its workforce by 4,000 jobs in the fourth quarter, representing less than 5% of its workforce. It had about 86,200 employees ⁠as of ​July 26. The restructuring plan is expected to cost Cisco up to $1 ​billion, with about $450 million to be recognised in the fourth quarter and the remainder in fiscal 2027.