"We are also committed to continued personalized learning and will provide one year of access to all Cisco U courses and certifications, covering AI, Security, Networking, and more," CEO Chuck Robbins wrote.
The decision: scale, timing, and rationale
Cisco will cut roughly five percent of its workforce, with close to 4,000 employees scheduled to be let go on Thursday, U.S. time, CEO Chuck Robbins said in a company blog post titled “Our Path Forward.” Robbins framed the reductions as part of a strategic repositioning for the "AI era," saying winners 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." He said Cisco will be "reducing roles in some areas" while also "making clear, strategic investments – particularly in silicon, optics, security, and in our employees’ use of AI across the company."
Financial performance: strong top- and bottom-line growth amid cuts
The layoffs come even as Cisco reported strong financial results for Q3 FY26. Revenue hit $15.8 billion, up 12 percent year over year, and net income rose 35 percent to $3.4 billion. Product orders grew 35 percent year over year, a figure that includes a 105 percent year-over-year surge in revenue from hyperscalers and 18 percent growth from other buyers. Robbins said Cisco has already recorded $5.3 billion of AI infrastructure sales this year and forecast full-year AI infrastructure sales of $9 billion—4.5 times its haul from last year.
Support for departing staff: training and outplacement promises
Robbins pledged company support for employees losing their jobs. Cisco will provide one year of access to Cisco U courses and certifications covering AI, Security, Networking, and other topics. The CEO also pointed to the company's outplacement efforts, saying they have a 75 percent success rate in helping former employees find new positions. Cisco disclosed that it had already run two large rounds of cuts in 2024—one removing seven percent of staff and another removing five percent—underscoring that the current reduction follows prior workforce restructurings.
Engineering priorities: memory reductions and supply-chain claims
Robbins described active product engineering and cost-efficiency programs aimed at preserving margin while responding to component-price pressure. He said customers will see products orderable in Q4 that "will actually require 50 percent less memory," and that the company has "20-plus programs that we’ve put into place that are active to reduce the memory utilization across the portfolio." Executives attributed the company maintaining margins despite rising memory and storage prices to supply-chain management efforts. Cisco also reported strong growth in more prosaic product lines, with Wi‑Fi kit sales up 40 percent.
Anthropic’s Project Glasswing, Mythos, and security appliance demand
During the earnings call Robbins revealed Cisco is participating in Anthropic’s Project Glasswing and using the Mythos model to test its own code. He said the bug-finding capabilities of Anthropic’s AI could accelerate customers' plans to replace security appliances if other vendors’ use of Mythos finds flaws that are difficult to patch. Robbins added that Cisco "may have won an order or two from customers who were already close to replacing old security kit 'and Mythos pushed them over the edge,'" but he was explicit that Cisco didn’t receive "any meaningful orders in Q3 as a result of Mythos, but that could change in the future as we continue to work with customers."
What this means for technologists, procurement leaders, and security teams
- Technologists: Expect a company focus on silicon, optics, and AI tooling—Cisco said it is shifting investment toward those areas and will provide one year of Cisco U training in AI and related domains for departing staff.
- Procurement leaders: Hyperscaler demand is driving a disproportionate share of growth—Cisco reported a 105 percent year-over-year surge from hyperscalers—while Cisco is preparing Q4 orderable products that use 50 percent less memory, which could change purchasing trade-offs.
- Security teams: Anthropic’s Project Glasswing and Mythos testing are already influencing customer modernization decisions; while Cisco reported no "meaningful orders in Q3" tied to Mythos, Robbins signalled that Mythos-driven vulnerability discovery could accelerate replacement of unpatchable appliances.
Cisco's announcement ties aggressive cost decisions to a bullish growth narrative: record revenue, double-digit growth, and a multi‑billion-dollar bet on AI infrastructure, even as nearly 4,000 staff will be shown the door and previous workforce reductions in 2024 are echoed. The concrete next markers to watch are the Q4 product launches claiming 50 percent lower memory requirements and whether Anthropic’s Mythos will translate into the "meaningful orders" Robbins said have not yet arrived.
