Cisco reported record Q3 FY26 revenue of $15.8 billion, up 12% year over year, yet announced workforce reductions of fewer than 4,000 jobs in Q4. The cuts represent less than 5% of the company's total employee base. CEO Chuck Robbins framed the move as necessary for competing in the AI era, citing a rapidly changing market and intensifying competition.

The company attributed the restructuring to a complex operating environment, including a global shortage of components critical for supporting its portfolio and customers' AI infrastructure buildouts. Robbins stated that companies succeeding in the AI era must maintain focus, urgency, and discipline in shifting investment toward areas with strongest demand and long-term value creation. While reducing headcount in some areas, Cisco plans strategic investments in silicon, optics, security, and AI tools for employees.

Notifications begin May 14, with affected employees receiving pro-rated FY26 bonuses. Cisco is offering placement services that have helped 75% of participants find new roles, plus one year of access to Cisco U courses covering AI, Security, Networking, and other certifications. The company emphasized handling departures "with the care, clarity, and respect that defines our culture."