Cisco announced record revenue while simultaneously revealing plans to cut 4,000 employees, approximately 5% of its workforce. During an investor call, CFO Mark Patterson clarified the move wasn't cost-driven but aimed at realigning resources around strategic technologies including silicon, optics, security, and AI. The company expects to recognize up to $1 billion in pre-tax charges related to these layoffs.

Affected workers will receive pro-rated fiscal 2026 bonuses, access to Cisco's placement services, and one year of free courses covering AI, security, and networking. These layoffs follow previous workforce reductions of 4,245 employees in February 2024 and approximately 6,000 people in August 2024, which were also attributed to restructuring around AI and security priorities.

CEO Chuck Robbins emphasized the layoffs "are building from a position of strength" and focus on technologies that will accelerate growth. The company reported strong financial results despite the workforce reductions, suggesting the strategy aims to position Cisco for future growth in key technological areas while maintaining profitability.