'While we are reducing roles…': Cisco CEO outlines company plans as it cuts 4,000 jobs

In a significant move, Cisco Systems has announced plans to reduce its workforce by 4,000 employees, marking nearly 5% of its global staff. This decision comes as the tech giant aims to streamline operations and channel resources into high-growth areas, particularly artificial intelligence (AI). Despite reporting a remarkable Q3 revenue of $15.8 billion—an impressive 12% increase from the previous year—Cisco's leadership is pivoting to address the challenges of a rapidly evolving market. CEO Chuck Robbins conveyed this strategy in a recent internal memo, emphasizing the necessity for structural changes amidst fierce competition and ongoing supply chain issues impacting critical components. The memo highlighted the importance of focused investment as companies transition into the AI era. Robbins stated, "The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest." The layoffs, which will commence on May 14, will be handled in accordance with local labor laws and regulations. Employees affected by the cuts will receive detailed information about their severance packages, including pro-rated bonuses and support through Cisco’s placement services, which has successfully placed 75% of its participants in new roles. While some positions are being eliminated, Cisco is simultaneously making strategic investments in critical areas such as silicon, optics, and security, as well as enhancing the use of AI within the company. Robbins expressed gratitude to those departing, acknowledging their contributions to the firm’s legacy and underscoring the company’s commitment to supporting them during this transition. Looking ahead, Cisco plans to engage employees further during a company-wide meeting on May 21, where they will discuss the future direction and the vital role the remaining workforce will play in the company’s growth in the upcoming fiscal year.