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

Cisco, the networking equipment giant, has announced a reduction of nearly 4,000 jobs, representing about 5% of its global workforce. This decision comes despite the company reporting better-than-expected profits and record revenue in its fiscal third quarter. The company stated that the layoffs are part of a strategy to optimize its cost structure and channel more investment into emerging technologies like artificial intelligence and cybersecurity.

This move by Cisco aligns with a recent trend observed across the tech industry, where several companies have cited a renewed focus on AI spending as a primary reason for workforce reductions. This pattern has emerged even in companies that have reported robust financial performance.

Cisco's increased focus on cybersecurity investments is particularly notable. The company has faced ongoing challenges related to security vulnerabilities in its routers and firewalls, which have been exploited by hackers to gain access to the networks of corporate clients, including the U.S. government. Furthermore, Cisco experienced a data breach last year that compromised customers' personal information.

Despite the job cuts, Cisco's CEO, Chuck Robbins, highlighted the company's "record revenue" and "double-digit growth" in a recent blog post. He also emphasized the company's strategic investments in leveraging AI across various internal operations. This round of layoffs is not an isolated incident; Cisco has implemented several other job reduction initiatives in recent years.