Cisco announces record revenue and 4,000 layoffs in the same day

In a surprising turn of events, Cisco CEO Chuck Robbins announced a significant workforce reduction on the same day the company reported record-breaking fiscal Q3 2026 earnings. Cisco's revenue surged by 12 percent year-over-year, reaching an impressive $15.8 billion, which Robbins proudly highlighted in a blog post. Despite the strong financial results, Robbins informed employees that the company would be reducing its workforce by fewer than 4,000 positions, amounting to less than 5 percent of its total staff. He emphasized that the notifications would commence on May 14 and would be conducted in accordance with local laws and regulations. The decision to cut jobs is being attributed to the evolving landscape driven by artificial intelligence (AI). Robbins mentioned that companies aiming to succeed in the AI era must show a commitment to adapting their investment strategies to align with areas of high demand and potential long-term value creation. This strategic shift necessitates difficult choices regarding investment priorities, organizational structure, and cost management. In light of these changes, Cisco plans to reinvest the funds from these job cuts into key areas, including silicon, optics, and security, while also enhancing the AI capabilities of its workforce. In its latest earnings report, Cisco revealed that it has generated $5.3 billion in sales from AI infrastructure for hyperscalers this fiscal year. The company is now projecting that orders for the fiscal year could reach $9 billion, up from a previous estimate of $5 billion, and expects revenue from AI to climb to $4 billion, surpassing the earlier forecast of $3 billion.