Cisco Cuts Jobs, Boosts AI Investment
Cisco will cut fewer than 4,000 jobs to shift investment towards AI, raising its annual revenue forecast due to increased hyperscaler orders.
Jason Kwon ·
Cisco Cuts Jobs, Boosts AI Investment
Cisco Systems Inc. announced on Wednesday it will eliminate fewer than 4,000 jobs, representing less than 5% of its workforce, as part of a strategic restructuring to reallocate investments towards artificial intelligence (AI) and related growth sectors. Concurrently, the networking equipment manufacturer raised its annual revenue forecast following a significant increase in orders from hyperscalers.
The company reported $5.3 billion in AI infrastructure orders from hyperscalers in the current fiscal year, elevating its full-year order expectation to $9 billion from a previous $5 billion. This surge reflects growing demand for high-speed networks necessary to connect large data-center systems, extending beyond just AI processors. Cisco's networking product orders increased over 50% in the third quarter compared to the prior year, with data-center switching orders rising more than 40%.
Cisco projects fiscal 2026 revenue between $62.8 billion and $63 billion, an increase from its earlier forecast of $61.2 billion to $61.7 billion. The restructuring plan is anticipated to incur costs up to $1 billion, with approximately $450 million recognized in the fourth quarter and the remainder in fiscal 2027. The company had approximately 86,200 employees as of July 26.