Redundancies are expected to cost company up to $1bn
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Cisco has announced plans to cut around 4,000 jobs this quarter, despite reporting record revenue. The decision affects less than 5% of Cisco’s workforce and will mainly impact staff worldwide.
Although the company did not specify the number of redundancies in particular locations such as San Jose or California, the job cuts are part of a strategic refocus on artificial intelligence (AI), security and other fast-growing sectors. Cisco CEO Chuck Robbins stressed the need for focus, urgency and disciplined investment in areas with strong demand and long-term value-creation potential.
This restructuring comes at a time when Cisco is experiencing sharply rising demand from major cloud and Internet companies that are investing heavily in AI data centres. The company has already secured $5.3 billion (€4.5 billion) in AI-related infrastructure orders and expects to reach $9 billion (€7.7 billion) by the end of the financial year, beating its original forecasts.
The redundancies are expected to cost Cisco up to $1 billion (€850 million), mainly for severance payments and other compensation for departing employees. This shift is in line with a broader trend in the tech industry, where companies such as Cisco are reallocating resources towards AI infrastructure and automation, leading to several rounds of job cuts in the Bay Area and beyond.
Cisco’s own financial results highlight this sector-wide focus. Orders for networking products rose by more than 50% in the past quarter compared with the same period a year earlier, while orders for data centre switches grew by more than 40%. These figures show the growing demand for infrastructure that supports the development and deployment of AI.
Business AM