Cisco Trims 5% of Workforce to Prioritize AI and Cybersecurity Investment
The networking giant announced thousands of job cuts alongside record revenue as it adjusts its cost structure for a data-driven future.
Primary source: TechCrunch AI. Full source links and update notes are below.
Fast summary
Start here
- Cisco is reducing its headcount by approximately 4,000 positions, or 5% of its total workforce.
- The layoffs occur despite the company reporting record quarterly revenue and exceeding profit expectations in its fiscal third quarter.
- The company plans to shift its cost structure to prioritize strategic investments in artificial intelligence and cybersecurity.
What happened
Technology giant Cisco announced a reduction of nearly 4,000 jobs, representing about 5% of its total workforce. The move is part of a broader plan to realign the company's financial resources toward high-growth sectors, specifically artificial intelligence and cybersecurity. The decision was disclosed alongside fiscal third-quarter results that surpassed analyst expectations for both profit and revenue.
What's new in this update
CEO Chuck Robbins confirmed the job cuts in a statement, characterizing the decision as a necessary shift in the company's cost structure. Despite reporting 'record revenue' and 'double-digit growth,' Cisco is prioritizing the integration of AI across its internal operations and product offerings. Robbins himself is slated for over $52 million in executive compensation for 2025, a figure the company did not comment on following the layoff announcement.
Key details
The pivot toward cybersecurity comes as Cisco addresses a series of high-profile security vulnerabilities in its routers and firewalls. These flaws have previously enabled hackers to compromise the networks of corporate clients and government entities. The company is also looking to bolster its defenses following a 2023 data breach that impacted customer personal information.
Background and context
This headcount reduction marks the latest in a series of contractions for the networking firm, which executed two rounds of layoffs in 2024 and cut another 150 positions in early 2025. Cisco joins other major tech firms, such as Cloudflare and General Motors, in citing AI spending requirements as a primary driver for staff reductions despite otherwise strong financial performance.
What to watch next
Observers are looking to see how quickly Cisco can integrate AI into its core networking and security products to justify the cost-cutting measures. Further scrutiny may also fall on executive compensation packages as the company continues to reduce its workforce while reporting record earnings.
Why it matters
It illustrates a growing trend where profitable tech firms prioritize AI-driven restructuring over workforce stability, even during periods of significant financial success.
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