Cisco Announces Record Q3 Revenue and AI-Driven Layoffs of Nearly 4,000 Employees

In its fiscal third-quarter 2026, Cisco Systems reported revenue of $15.8 billion (some filings list $15.84 billion), a 12 percent year-over-year increase and a beat of Wall Street expectations. The company also disclosed AI-infrastructure orders of $5.3 billion to date and raised its full-year AI order target from $5 billion to $9 billion. Net income rose to $3.37 billion, and adjusted earnings per share reached $1.06, surpassing the $1.04 consensus.

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The layoffs follow earlier workforce reductions in 2024 and 2025, reflecting a broader industry shift toward AI-centric spending. Cisco’s leadership framed the move as a “reallocation of resources” rather than a response to weak demand. The company plans to redirect capital into silicon, optics, security and internal AI tools while trimming roles in slower-growing segments.

TechRadar

• Job cuts: ? 4,000 positions, < 5 percent of the 86,200-strong global workforce.

Cisco announces 5% layoffs while posting record $15.8 billion revenue

• Restructuring cost: up to $1 billion, with about $450 million booked in Q4 and the remainder in FY 2027.

Cisco to cut about 4,000 jobs in AI-focused restructuring as orders surge

• AI-related revenue outlook: $4 billion for FY 2026, projected $6 billion for FY 2027 (CFO Mark Patterson).

Cisco’s AI order surge makes its layoffs harder to ignore – Startup Fortune

• Market reaction: shares rose 13-20 percent in after-hours trading, marking the strongest single-day gain since 2002.

Cisco Jumps 18% After Announcing 4,000 Job Cuts and AI Investment Push

Cisco positions its networking hardware as critical “infrastructure for the AI era,” citing rapid growth in hyperscaler data-center demand. Analysts note that the AI tailwind expands opportunities for high-speed switches, optical transceivers and custom silicon, but also stress that margin pressure and flat security revenue could temper profitability. The restructuring signals confidence that AI-linked products will become the primary growth engine for the company.

Cisco Smashes Q3 FY2026 With Record $15.8B Revenue and $2.1B in AI Orders - Is CSCO a Buy at $102?

Cisco’s CEO Chuck Robbins emphasized that the company must “focus, urgency, and discipline” to shift investment toward high-value AI areas. He described the layoffs as “hard decisions” necessary to align the cost structure with market opportunity. CFO Mark Patterson highlighted the reasonableness of targeting at least $6 billion of AI hyperscale revenue in FY 2027 and reiterated the $1 billion restructuring budget.

Cisco announces 5% layoffs while posting record $15.8 billion revenue

Some analysts caution that the rapid reallocation may strain operating margins, noting a decline in gross margin from 68.6 percent to 66.0 percent year-over-year. Security revenue remained flat, and the high valuation—trading at roughly 18-23 times forward earnings—has prompted warnings that the AI boost does not improve every line of the profit-and-loss statement. Others view the layoffs as a strategic reset rather than a sign of distress.

Cisco stock price surges 20% as firm plans 4,000 layoffs amid AI-led restructuring on order boom — More steam ahead?

Sources differ slightly on the exact Q3 revenue figure ($15.8 billion vs. $15.84 billion) and on the quarterly AI order amount ($2.1 billion reported for Q3 versus the $5.3 billion year-to-date total). No source disclosed which business units will bear the cuts, leaving the precise internal impact unclear.

Cisco Jumps 18% After Announcing 4,000 Job Cuts and AI Investment Push

• “We are making changes today that will result in the reduction of our overall workforce in Q4 by fewer than 4,000 jobs, representing less than 5 percent of our total employee base,” — Chuck Robbins, CEO, Cisco

Ars Technica

• “The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest,” — Chuck Robbins, CEO, Cisco

Cisco layoffs hit 4,000 jobs as hyperscaler AI orders near USD 9 billion

• “Given the speed at which the market is moving, we need to make a rapid reallocation of resources,” — Chuck Robbins, CEO, Cisco

CNBC

• “I'm confident Cisco will be one of those winners. This means making hard decisions — about where we invest, how we're organized, and how our cost structure reflects the opportunity in front of us.” — Chuck Robbins, CEO, Cisco

CNBC

• “We will provide support in finding new opportunities, whether internal or external, through Cisco’s placement services,” — Chuck Robbins, CEO, Cisco

TechRadar

• “On a post-earnings call, Cisco's ?finance chief, Mark Patterson, said it is "reasonable" to expect at least $6 billion of revenue on the AI hyperscale side in fiscal 2027.” — Mark Patterson, CFO, Cisco

Cisco to cut about 4,000 jobs in AI-focused restructuring as orders surge