What They Did
Cisco Systems built and still sells the plumbing of the internet — routers, switches, optics, and the security products layered on top. For four decades it was the default enterprise networking vendor, employing roughly 80,000 people worldwide.
How LLMs Killed Them
Cisco is a company being rewritten by its best quarter. On May 14, 2026, alongside record fiscal Q3 revenue of $15.8 billion — up 12% year over year — it began notifying employees of a restructuring that cuts about 5% of roles, just under 4,000 jobs. The money is not leaving; it is moving. Cisco raised its expected fiscal 2026 AI infrastructure orders from $5 billion to $9 billion, with hyperscaler AI orders already at $5.3 billion year to date, and said it was reallocating resources toward silicon, optics, security, and quantum networking. The restructuring could cost up to $1 billion. The pattern is now familiar across 2026: demand from AI data-center buildouts is so strong that it justifies firing thousands of people in the parts of the company that AI demand does not touch.
Timeline
- 2024: Two separate rounds of layoffs as Cisco reorganized around software and security.
- 2025: Further smaller cuts as AI networking demand began to accelerate.
- May 14, 2026: Reported record Q3 revenue of $15.8B and began notifying employees of ~4,000 job cuts (5% of roles).
- May 2026: Raised fiscal 2026 AI order forecast from $5B to $9B; shares jumped more than 16% after hours.
- FY2026–FY2027: Up to $1B in restructuring charges, ~$450M recognized in Q4.
By the Numbers
- ~4,000 jobs cut — about 5% of roles
- Record Q3 revenue of $15.8B, up 12% YoY
- AI orders forecast raised from $5B to $9B for fiscal 2026
- $5.3B in AI hyperscaler orders year to date
- Up to $1B in restructuring costs