Cisco announced job cuts on the same day it reported record third-quarter revenue of $15.8 billion.
Cisco Chief Executive Officer Chuck Robbins published a blog post titled “Our Path Forward” on May 13, 2026, in which he shared an internal email sent to Cisco employees.
The email opens with an optimistic tone, noting the company’s “double-digit top and bottom-line growth”.
However, it then went on to say that Cisco will be among the “winners” of companies in an AI-era which necessitates making “hard decisions,” namely the reduction of just under 5% of the company’s over 80,000 strong workforce.
“We [Cisco] are making changes today that will result in the reduction of our overall workforce in Q4 by fewer than 4,000 jobs,” the email said.
The company didn’t provide details on the specific roles and departments that would be impacted, but Cisco said it started sending emails to those affected starting on May 14.
The cost of the layoffs, according to a securities filing, is in the realm of $1 billion before taxes, with much of this amount attributed to severance and other payments to affected employees.
The network infrastructure giant says it will make strategic investments “in silicon, optics, security, and in our employees’ use of AI across the company.”
In its quarterly earnings report, Cisco said it’s enjoyed “significant momentum and raised expectations for AI infrastructure from hyperscalers,” boasting $5.3 billion in orders so far this fiscal year. It expects approximately $9 billion in AI orders for the full year, up from $5 billion.
Other companies making similar strategic decisions.
Cloudflare recently announced plans to lay off over 1,100 employees. According to an official Cloudflare blog post which shared an email sent to its global team, the decision was not a “cost-cutting exercise,” but about defining how a “high-growth company operates and creates value in the agentic AI era.”
And it’s not just isolated to the tech industry.
Starbucks, currently going through a major turnaround strategy, announced earlier today that it will cut 300 corporate employees in its third round of job cuts. “Leaders have taken a hard look at their respective functions to further sharpen focus, prioritize work, reduce complexity, and lower costs,” a Starbucks spokesperson was quoted by The Seattle Times as saying.
