Cisco announced Wednesday it will cut nearly 4,000 jobs, part of a restructuring to shift investment toward artificial intelligence and growth areas. The networking equipment maker also raised its annual revenue forecast after a surge in hyperscaler orders.
The company's shares jumped 15% in extended trading.
"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," said CEO Chuck Robbins.
Cisco is investing in silicon, optics, security, and AI training for employees, while cutting roles in other areas. The company has taken $5.3 billion in AI infrastructure orders from hyperscalers this fiscal year, raising its order expectation to $9 billion from $5 billion.
It now forecasts fiscal 2026 revenue between $62.8 billion and $63 billion, up from $61.2 billion to $61.7 billion previously.
The restructuring plan will cost up to $1 billion, with about $450 million recognized in the fourth quarter and the remainder in fiscal 2027.
Cisco had about 86,200 employees as of July last year. The job cuts represent less than 5% of its workforce.