The networking company reported better-than-expected financial results in its third fiscal quarter, but is adjusting its cost structure to prioritize artificial intelligence and cybersecurity.
Cisco, the giant of networking equipment, announced the layoff of nearly 4,000 jobs, representing about 5% of its workforce. This measure comes despite the company reporting better-than-expected earnings and revenue in its third fiscal quarter.
According to the company, the layoffs aim to modify its cost structure to allocate more resources to artificial intelligence and cybersecurity. This move is part of a recent trend in the tech sector, where several firms prioritize spending on AI even after posting solid financial numbers.
In recent days, companies like Cloudflare and General Motors also made personnel adjustments despite strong results. In Cisco's case, the cuts are part of a series of similar moves in recent years.
Investments in security and pending challenges
The company indicated that it plans to increase its investments in cybersecurity. This comes as it faces multiple vulnerabilities in routers and firewalls that have allowed intrusions into corporate clients' networks, including U.S. government agencies.
Additionally, last year Cisco suffered a data breach that affected personal information of its customers. These security issues add pressure to the company's strategy in a context where cyber threats continue to rise.
In a blog post published this Wednesday, Cisco's CEO, Chuck Robbins, highlighted the “record revenues” and “double-digit growth” of the company. At the same time, he acknowledged the strategic investments they are making, including the use of AI by employees across the organization.
Context of previous cuts
This is the latest round of adjustments at Cisco in recent years. The firm had already laid off thousands of employees on two occasions in 2024 and cut 150 positions in 2025. The changes in the workforce are presented as part of a broader restructuring.
According to public filings, Robbins' compensation package for 2025 would exceed $52 million. When asked, a Cisco spokesperson did not respond whether the executive plans to reduce his salary in line with the personnel adjustments.
The scenario reflects the current dilemma of many tech companies: balancing record profitability with the need to quickly adapt to the AI race. Cisco bets that these cuts will allow it to be more competitive in AI and strengthen its position in security, areas considered key to its future.
The employees affected by this round of layoffs join a wave of adjustments that has been shaking the tech sector, where the balance between growth and operational efficiency dominates corporate decisions. While financial numbers shine, thousands of workers face the uncertainty of restructuring.
The company remains focused on innovating and protecting its products against an increasingly sophisticated landscape of cyber threats. How this strategy will impact the medium term is something that analysts and investors in the sector will closely monitor.
