Cisco Systems will cut nearly 4,000 jobs, about 5% of its workforce, as part of a broad restructuring aimed at shifting resources toward faster-growing areas including artificial intelligence infrastructure, silicon, optics and security, the company said on Wednesday.
Cisco employs about 800 people in Israel, where its development center is considered one of the company’s most important worldwide. The Israeli operation is spread across several sites, including Netanya, Tel Aviv and Caesarea, and works on cloud security, chips and network automation. If the cuts in Israel mirror the global rate, an estimated 30 to 40 employees could be affected.
CEO Chuck Robbins said in a blog post that the decision reflected Cisco’s effort to focus on areas with stronger long-term demand.
“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.
He said the shift required difficult decisions on investments, organization and costs.
The restructuring is expected to cost up to $1 billion before taxes, mainly from severance payments and retirement benefits. About $450 million will be recorded in the fourth quarter of fiscal 2026, with the rest in 2027. Employees worldwide began receiving layoff notices Thursday.
Cisco said it would help departing workers find new opportunities and provide severance, prorated bonuses for fiscal 2026 and access to certification courses for one year.
The cuts were announced alongside strong quarterly results. According to Reuters, Cisco reported fiscal third-quarter revenue of $15.84 billion, up 12% from the same period last year and above analysts’ expectations. Net income rose to $3.37 billion from $2.49 billion a year earlier. Orders for networking products grew by more than 50%, while orders for data center switches rose by more than 40%.
Following the strong results, Cisco raised its full-year outlook. The company now expects fiscal 2026 revenue of $62.8 billion to $63 billion, up from a previous forecast of $61.2 billion to $61.7 billion. It forecast earnings per share of $3.16 to $3.21, above its earlier projection of $3.00 to $3.08.