Cisco is reporting record AI orders — and cutting nearly 4,000 jobs at the same time. The news dropped on May 13 alongside quarterly earnings, and the market had its own take: the stock jumped 17 percent.
What’s Happening
Less than five percent of the workforce is affected, primarily in legacy switching, routing, and parts of the Talos and Splunk security divisions. The freed-up budget is earmarked for AI networking, chip design, and cloud security hires. The restructuring will cost Cisco up to $1 billion, spread across this fiscal year and next.
The Irony
What makes this case stand out: CEO Chuck Robbins had publicly stated just days earlier that Cisco wouldn’t cut jobs because of AI. Now that’s exactly what’s happened — though in different framing. Cisco describes it as a strategic realignment, not AI-driven layoffs. The people losing their jobs probably don’t care much about the distinction.
A Pattern Emerges
Cisco isn’t alone. In recent weeks, Cloudflare (1,100 positions) and other tech companies have cut staff while citing the shift toward AI. The pattern is always the same: AI revenue goes up, headcount goes down, stock price rises.
For those affected, that’s cold comfort. The skills that were in demand yesterday — traditional network engineering, legacy security ops — are losing value, while AI expertise becomes the entry ticket.
What This Means
The AI transformation inside corporations isn’t an abstract future vision anymore. It’s happening right now, at the world’s biggest tech companies. And it has winners and losers — sometimes in the same earnings report.
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