Cisco announced a major restructuring that will reduce its workforce by almost 4,000 employees as the company redirects resources toward artificial intelligence and related growth sectors. This move accompanies a notable upward revision of its annual revenue forecast fueled by strong demand from hyperscale customers.
The San Jose-based networking giant highlighted that the job reductions will amount to less than 5% of its total staff, which numbered around 86,200 as of last July. Despite the cuts, Cisco is accelerating strategic investments in cutting-edge technologies such as silicon chips, optics, cybersecurity, and integrating AI tools across its operations to enhance productivity and innovation.
The company has already secured $5.3 billion in AI infrastructure orders from hyperscalers this fiscal year and now expects total AI-related orders to reach approximately $9 billion—an increase from its previous forecast of $5 billion. Correspondingly, Cisco raised its fiscal 2026 revenue guidance to between $62.8 billion and $63 billion, up from an earlier estimate of $61.2 billion to $61.7 billion.
The restructuring expenses tied to this strategic pivot could reach $1 billion, with nearly half of that amount expected to be recorded in the current fiscal quarter and the remainder in fiscal 2027. Cisco’s CEO emphasized that adaptability and continual investment alignment with market demand are essential to succeeding in the emerging AI landscape.