Cisco is trying to reinvent itself for the AI era, and Wall Street appears convinced the strategy is beginning to work. The networking company reported stronger-than-expected quarterly results on Wednesday, raised its annual revenue forecast, and revealed booming demand for AI infrastructure products, triggering a sharp rally in its shares.
The upbeat numbers arrived alongside a tougher announcement. Cisco is cutting nearly 4,000 jobs as part of a restructuring aimed at shifting spending and resources toward artificial intelligence and future-growth businesses. The move reflects a broader trend across the technology industry, where companies are increasingly reshaping workforces around AI priorities.
Cisco layoffs
Cisco said the latest round of cuts will affect fewer than 5 percent of its total workforce. The restructuring is expected to result in around $1 billion in pre-tax charges, with approximately $450 million recognized during the current fiscal quarter.
Chief executive Chuck Robbins said the company must continue reallocating investments to areas with the strongest long-term demand. In a blog post, Robbins described the AI market as one that rewards companies that can move quickly and make difficult operational decisions.
The layoffs make Cisco the latest major tech company to link workforce reductions directly to artificial intelligence investments. As AI infrastructure spending accelerates globally, firms are increasingly redirecting budgets away from legacy operations and towards data centers, networking hardware, and AI-focused software.
Despite the job cuts, investors reacted positively to Cisco’s broader outlook, particularly its growing exposure to hyperscalers building AI systems at scale.
Cisco’s revenue this year
The company said it has already received $5.3 billion in AI infrastructure and hyperscaler orders this year, prompting Cisco to sharply raise its annual expectations. It now expects AI-related orders to reach $9 billion during the fiscal year, up from its previous estimate of $5 billion.
Cisco also increased its projected AI-related revenue forecast to $4 billion from an earlier estimate of $3 billion.
For the quarter ending April 25, Cisco reported revenue of $15.84 billion, ahead of analyst expectations of $15.56 billion. Adjusted earnings per share came in at $1.06, slightly above consensus estimates.
The company’s networking division emerged as a key growth driver, with revenue jumping 25 percent year-on-year to $8.82 billion. Cisco also launched new switches and routers powered by its next-generation processors during the quarter, alongside a cybersecurity-focused leaderboard ranking generative AI models based on their resilience against attacks.
The strong results helped push Cisco’s shares up by more than 16 percent in extended trading. If those gains hold, it would mark the company’s biggest single-day rally since 2002.
Although Cisco entered the AI race later than several of its data-center rivals, investors increasingly see the company as a critical supplier of the networking infrastructure powering the global AI expansion.
