Cisco Lays Off to Fund AI Boom

Last month, Cisco (Nasdaq: CSCO) announced its third quarter results that delivered record revenues. The company is benefiting from AI-related orders. Besides announcing a record quarter, it also announced significant layoffs.

Cisco’s Financials

Cisco’s third quarter revenue grew 12% to $15.84 billion, ahead of analyst estimates of $15.56 billion. EPS of $1.06 was also ahead of analyst estimates of $1.04.

Among key segments, its networking revenue grew 25% to $8.82 billion, ahead of the $8.47 billion market estimate. Security revenue was flat at $2 billion, and marginally ahead of market estimates of $1.99 billion. Collaboration revenues were down 1% to $1 billion, and Observability revenues grew 3% to $269 million. Services revenues reduced 1% over the year to $3.7 billion.

For the fourth quarter, Cisco expects revenues of $16.7-$16.9 billion and an EPS of $1.16-$1.18. The market was looking for revenues of $15.82 billion and an EPS of $1.07.

Cisco’s AI Growth

Cisco is seeing a strong growth for its AI products. Year to date, it has received $5.3 billion in AI infrastructure and hyperscaler orders. It now expects to end the year with $9 billion in these orders compared with $5 billion anticipated earlier. It continues to cater to the market through new product launches.

Earlier this year, it announced the release of Silicon One G300, a switching silicon designed for AI cluster buildouts. The Cisco Silicon One G300 will power new Cisco systems used in AI networking in the data center. The systems feature innovative liquid cooling and support high-density optics to deliver improved efficiency and customer returns. Cisco also enhanced Nexus One to simplify the operation of AI networks for enterprises.

Cisco believes that as AI continues to scale, data movement will become key to efficient AI compute and the network will become a part of the compute itself. Organizations will no longer look only for faster GPUs, but also for faster, congestion-free networks. The programmable G300 combines fully shared packet buffer, path-based load balancing, and proactive network telemetry to offer better performance and profitability for large-scale data centers. With Intelligent Collective Networking, Cisco believes that it can deliver 33% increased network utilization, and a 28% reduction in job completion time.

Cisco is also extending AI-focused product releases across its security offering. It recently enhanced its security products with additional capabilities that include Agent Identity Management, so customers can register agents in Duo IAM and map them to accountable human owners so that every AI agent has a verified identity and the organization can trace their actions; Agent and Tool Visibility to discover agentic and non-human identities to help organizations understand existing AI usage and stricter access control by assigning fine-grained permissions only for specific tasks. Additionally, Cisco also launched an LLM Security Leaderboard, a comprehensive resource for evaluating model risk. The leaderboard uses transparent evaluation signals to rate model performance metrics against malicious prompts, jailbreak attempts, and other manipulation strategies.

Layoffs at Cisco

Cisco may be seeing strong growth from its AI initiatives and offerings, but like other tech players, it too is rationalizing headcount. Earlier this month, it announced plans to lay off 4,000 employees, less than 5% of its total headcount. Cisco attributed the headcount reduction to the need to “shift investment toward the areas where demand and long-term value creation are the strongest”.

Cisco’s stock is trading at $124.15 with a market capitalization of $468.3 billion. It touched a 52-week high of $130.37 soon after the result announcement. The stock has climbed from the 52-week low of $63.87 that it was trading at a year ago.

As of April 2026, the global tech industry has recorded 78,557 layoffs, with 76.7% occurring in U.S. companies. While giants like Oracle (25,000+), Amazon (16,000), and Block (4,000) lead the charge, a disturbing pattern has emerged.

According to research by Alan Cohen (RationalFX), nearly half of these job losses are now explicitly tied to “AI Restructuring.” However, a deeper analysis suggests that AI is often being used as an “AI-as-an-excuse” narrative to justify aggressive cost-cutting and boost sagging stock prices. Companies like Oracle have automated the termination process itself, firing thousands via 6:00 AM emails—a cold-blooded approach that reflects a total deficit of empathy and human kindness.

The 1Mby1M Perspective: Stop Being the Victim

There is only one permanent solution to this trend of mass layoffs and “AI-driven” displacement: Learn to become an entrepreneur. You don’t have to build a “Unicorn.” You just need to solve a real problem, build a sustainable business, and create your own livelihood. This tsunami of layoffs will continue; paralysis is not a solution. * If you have been laid off: Now is the time to pivot your skills toward a venture you own.

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One Million by One Million (1Mby1M) is the first global virtual accelerator in the world, founded in 2010 by Silicon Valley serial Entrepreneur Sramana Mitra. It offers a fully online entrepreneurship incubation, acceleration and education resource for solo entrepreneurs and bootstrapped founders working on tech and tech-enabled services ventures.

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