Cisco cuts nearly 4,000 jobs to spend more on AI, reports ‘record quarterly revenue’

Cisco is eliminating close to 4,000 jobs in its latest round of layoffs, with the company explicitly framing the cuts as a reallocation of resources toward artificial intelligence investment. The announcement came alongside a quarterly earnings report the company described as its strongest on record.

The Details

Cisco's headcount reduction represents roughly 5% of its global workforce, continuing a pattern of job cuts the networking giant has carried out over the past several years. Despite the layoffs, CEO Chuck Robbins highlighted record quarterly revenue, positioning the workforce reduction as a strategic move rather than a sign of financial distress.

Key points from the announcement:

• The cuts affect nearly 4,000 employees across various teams and regions
• Leadership cited AI infrastructure and development as the primary destination for redirected spending
• The company reported record quarterly revenue, though specific figures were tied to the full earnings release
• This marks at least the second significant round of layoffs at Cisco in recent years

Cisco's leadership framed the decision as necessary investment in AI capabilities to remain competitive in an evolving technology landscape.

The move mirrors a pattern emerging across major tech vendors, where strong revenue figures and aggressive AI spending announcements are being delivered alongside workforce contractions. Cloudflare made a similar move recently, attributing over 1,100 job eliminations directly to AI-driven efficiency gains.

Why This Matters for Service Providers

Cisco is a foundational vendor for a large portion of the MSP and telecom reseller ecosystem, and its strategic pivot carries real implications for partners. When a vendor of this scale redirects investment toward AI, product roadmaps shift, and partner programs often follow. MSPs should expect Cisco's AI-focused offerings to accelerate while legacy product lines receive less development attention and support.

There is also a broader competitive signal here. As enterprise vendors embed AI more deeply into their core networking and communications stacks, resellers who are not building their own AI service layer risk being outpaced. Adding AI-powered services to your existing stack, whether through voice automation, analytics, or intelligent call handling, is no longer a differentiator; it is becoming table stakes. For guidance on how to structure that offering, the MSP revenue stacking framework covers how voice, security, and AI can work together as growth pillars.

Looking Ahead

Watch how Cisco's partner program evolves over the next two to three quarters as AI spending takes shape in actual products and certifications. Service providers who are already building AI capabilities into their stack will be better positioned to absorb and resell whatever Cisco brings to market next.

For the full story, read the original article on TechCrunch AI.