Cisco Systems (NASDAQ:CSCO) is cutting nearly 4,000 jobs as part of a sweeping restructuring effort designed to accelerate its push into artificial intelligence, security, silicon and networking infrastructure.
Cisco Restructuring Focuses On AI, Security And Silicon
On Wednesday, the networking giant announced the workforce reduction, framing the move as a strategic repositioning rather than a traditional cost-cutting initiative.
Cisco said growing demand from hyperscale cloud customers and AI-related infrastructure is driving the need to redirect investments toward faster-growing business segments.
During the company's third-quarter earnings call, CFO Mark Patterson noted that the restructuring is intended to improve execution speed in critical growth markets.
"This was really not a savings-driven restructure," Patterson said. "[It's] really realigning resources around silicon, optics, security and AI."
He added that rapid technological shifts are forcing Cisco to ensure talent and investments are concentrated in the right areas to stay competitive.
Chuck Robbins Says AI Era Requires Urgency
Earlier during the announcement, CEO Chuck Robbins reinforced that message, describing the layoffs as part of a broader transformation strategy aimed at long-term value creation.
"The companies that will win in the AI era 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," Robbins said.
Cisco Raises Revenue Outlook Amid Hyperscaler Demand
Cisco posted third-quarter revenue of $15.84 billion, topping analyst estimates of $15.56 billion, while adjusted earnings of $1.06 per share beat expectations of $1.03.
For the fiscal fourth quarter, Cisco forecast revenue of $16.7 billion to $16.9 billion, above estimates of $15.82 billion and adjusted earnings of $1.16 to $1.18 per share, ahead of projections of $1.07 per share.
The company also raised its full-year revenue guidance to $62.8 billion to $63 billion, up from its previous outlook of $61.2 billion to $61.7 billion and above analyst expectations of $61.6 billion.
Price Action: On Wednesday, Cisco Systems shares jumped 19.8% to $122 in after-hours trading after closing the regular session up 2.6% at $101.87, according to Benzinga Pro.
According to Benzinga Edge Rankings, CSCO ranks in the 85th percentile for Momentum, driven by solid performance across short, medium and long-term time frames.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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