Cisco cuts 4,000 workers despite record revenue, shifting focus to AI and cybersecurity
Cisco has announced plans to cut nearly 4,000 jobs, or roughly 5% of its global workforce, even as the networking giant posts better-than-expected profit and revenue for its fiscal third quarter. The company says it needs to restructure its cost base to pour more resources into artificial intelligence and cybersecurity.
This decision places Cisco among a growing list of tech firms that are prioritizing AI spending while trimming headcount. Recently, both Cloudflare and General Motors have laid off employees despite strong financial performances. The trend signals a broader shift in how technology companies allocate capital.
Why Cisco is cutting jobs despite record revenue
Cisco reported what it called “record quarterly revenue” and “double-digit growth” in its latest earnings. However, the company is still moving forward with a significant reduction in staff. The networking equipment maker explained that it needs to adjust its “cost structure” to free up funds for strategic investments.
According to CEO Chuck Robbins, the company is making targeted investments “in our employees’ use of AI across the company.” In a blog post, Robbins highlighted the strong financial results while acknowledging the need for change. The layoffs are part of a broader effort to streamline operations and focus on high-growth areas.
Cisco’s AI and cybersecurity push
A major driver behind the job cuts is Cisco’s ambition to expand its presence in cybersecurity. The company has been grappling with a series of security vulnerabilities in its routers and firewalls. These flaws have allowed hackers to breach the networks of corporate clients, including the U.S. government.
Last year, Cisco also suffered a data breach that exposed customers’ personal information. Investing in cybersecurity is therefore not just a growth opportunity but a defensive necessity. The company aims to strengthen its product offerings and restore trust among its client base.
For more insights on how tech giants are reshaping their strategies, check out our article on AI investment trends in the tech industry.
Executive compensation questioned amid layoffs
While thousands of employees face job losses, Cisco’s top executive is set to earn a substantial package. According to public filings, CEO Chuck Robbins is slated to receive more than $52 million in executive compensation during 2025. When asked whether Robbins plans to reduce his own pay, a Cisco spokesperson declined to comment beyond the CEO’s earlier statement.
This disparity has sparked criticism, as it echoes similar situations at other tech companies where executives earn millions while workers are let go. The move raises questions about corporate priorities and fairness in compensation structures.
A history of job cuts at Cisco
This latest round of layoffs is not an isolated event. Cisco has reduced its workforce multiple times in recent years. In 2024, the company conducted two separate layoffs that affected thousands of employees. Earlier in 2025, it cut over 150 jobs as part of ongoing restructuring efforts.
Building on this pattern, the current cuts suggest that Cisco is undergoing a fundamental transformation. The company is moving away from its traditional hardware-centric model toward software, services, and AI-driven solutions. This shift requires different skill sets, which may explain the repeated workforce reductions.
To understand how other companies are navigating similar transitions, read our analysis on tech industry layoffs and restructuring strategies.
What this means for the tech industry
Cisco’s decision underscores a broader trend: even profitable tech companies are cutting jobs to fund AI initiatives. This creates a paradox where strong financial results coexist with significant layoffs. Employees in traditional roles, such as hardware engineering or sales, may find themselves at risk as companies pivot toward AI and cybersecurity.
On the other hand, demand for AI specialists and cybersecurity experts is surging. Cisco’s investment in these areas could create new opportunities for skilled professionals. However, the immediate impact is painful for the nearly 4,000 workers who will lose their jobs.
For more context on the evolving job market, see our guide on AI-related career paths and skills in demand.
