capital · May 17, 2026
Cisco Workforce Reduction of 4,000 Jobs Funds AI Infrastructure Push
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Cisco announced a Q4 workforce reduction of fewer than 4,000 jobs less than 5% of total headcount on May 14, 2026, as part of an AI-driven strategic shift. Impacted employees will receive a pro-rated FY26 bonus and placement support while the company expects about $1 billion in gross costs from the layoffs. Cisco closed its $28 billion all-cash acquisition of Splunk in March 2024 anchoring its security strategy to protect the AI revolution. William Kerwin senior equity analyst at Morningstar noted that the layoffs will provide a modest benefit to operating spending but primarily allow reinvestment in growth areas. Morningstar raised its fair value estimate to $90 from $75 citing higher forecasts for campus and AI revenue over the next five years.