Cisco cuts nearly 4,000 jobs despite record revenue, redirects spending to AI and cybersecurity

Networking equipment giant Cisco announced it is cutting fewer than 4,000 jobs — approximately 5% of its workforce — even as it reported better-than-expected profit and revenue for its fiscal third quarter. The company said the reductions are part of a plan to restructure its cost base and increase investment in artificial intelligence and cybersecurity.

Layoffs come despite strong financial results

Cisco reported record quarterly revenue and double-digit growth, according to CEO Chuck Robbins, who touted the company’s performance in a blog post Wednesday. However, the company simultaneously moved to reduce headcount, a decision that mirrors a broader trend across the technology sector. In recent days, Cloudflare and General Motors have also announced layoffs while reporting strong financials, each citing a strategic pivot toward AI as a key reason.

The job cuts are the latest in a series of workforce reductions at Cisco. The company laid off thousands of employees in two separate rounds in 2024, and cut 150 jobs earlier in 2025. The pattern has drawn scrutiny from industry analysts who question whether layoffs are genuinely tied to cost structure changes or are being used to signal aggressive AI adoption to investors.

Cybersecurity spending takes center stage

Cisco has been under pressure to bolster its cybersecurity offerings after a series of security vulnerabilities in its routers and firewalls allowed hackers to breach networks of corporate customers, including U.S. government agencies. The company also suffered a data breach last year that exposed customers’ personal information.

In his blog post, Robbins acknowledged that the company is making strategic investments in employees’ use of AI across the organization. Public filings show Robbins was slated to earn more than $52 million in executive compensation during 2025. When asked by Bitcoin World whether Robbins plans to reduce his own compensation amid the layoffs, a Cisco spokesperson did not respond to a request for comment.

What this means for the tech industry

The Cisco layoffs underscore a growing disconnect in the tech sector: companies reporting strong earnings are simultaneously cutting jobs, with AI investment often cited as the catalyst. For workers, this signals a shift in priorities where cost reduction and AI infrastructure spending are valued over maintaining headcount. For investors, it raises questions about whether AI spending will deliver the returns companies are promising.

The trend also highlights a competitive pressure among legacy tech firms to reinvent themselves as AI leaders, even if it means shedding experienced staff. Cisco’s pivot to cybersecurity is particularly notable given the rising frequency and sophistication of cyberattacks targeting critical infrastructure.

Conclusion

Cisco’s decision to cut nearly 4,000 jobs while reporting record revenue reflects a strategic recalibration toward AI and cybersecurity, but it also adds to a growing narrative of workforce reductions in profitable tech companies. The long-term impact on Cisco’s innovation capacity and employee morale remains to be seen, but the move positions the company to compete more aggressively in AI-driven networking and security markets.

FAQs

Q1: How many jobs is Cisco cutting?
Cisco is cutting fewer than 4,000 jobs, which represents about 5% of its total workforce.

Q2: Why is Cisco laying off employees despite strong revenue?
The company says it needs to change its cost structure to invest more heavily in AI and cybersecurity, a justification also used by other tech firms recently.

Q3: Has Cisco laid off employees before?
Yes, Cisco conducted two separate layoff rounds in 2024 and cut 150 jobs earlier in 2025, making this the latest in a series of workforce reductions.