Why Cisco is axing a fifth of its workforce even as AI demand ramps up

As CEO Chuck Robbins talked about another strong strong AI-driven quarter for Cisco, up to 4,000 of the firm’s staffers, five percent of the total workforce, are about to join the growing ranks of the tech sector’s AI-enabled unemployed.

Robbins told Cisco employees in a memo that the firm is re-structuring parts of the business to focus more heavily on AI-related opportunities and infrastructure demand. The lay-offs could cost the firm a charge of around $1 billion, according to a regulatory filing, but Robbins emphasized in his communique that the decision had been made based to position the firm better for future growth:

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.

Cisco has taken $5.3 billion in AI infrastructure orders from ...