Layoffs Announced by Cisco and LinkedIn
Cisco and LinkedIn are set to cut thousands of jobs, with Cisco announcing a reduction of fewer than 4,000 positions, representing less than 5 percent of its workforce. This decision follows a successful fiscal third quarter, where Cisco reported record revenue of $15.8 billion, a 12 percent increase year-over-year. LinkedIn has not disclosed the exact number of layoffs but confirmed that it would also be making significant cuts.
The Rationale Behind the Cuts
Cisco CEO Chuck Robbins highlighted the impact of artificial intelligence as a driving factor for the layoffs. In a blog post, Robbins stated that companies need to shift investment toward areas of demand and long-term value creation to thrive in the AI era. Cisco plans to redirect resources toward silicon, optics, security, and AI technologies. CFO Mark Patterson emphasized that this restructuring was not primarily about cost savings but rather aligning resources to meet rapidly changing market needs.
Financial Implications of Layoffs
Cisco expects to incur up to $1 billion in pre-tax charges due to the layoffs, with $450 million recognized in the fourth quarter of fiscal 2026. The company has seen robust sales in AI infrastructure, projecting orders to reach $9 billion for the fiscal year, up from $5 billion. Despite the layoffs, Robbins maintained that the company is building from a position of strength, focusing on technologies that will drive future innovation.
Support for Affected Employees
Cisco plans to offer support to those laid off, including pro-rated bonuses for the fiscal year and access to job placement services. Robbins noted that 75 percent of participants in Cisco’s placement program successfully find new roles. Additionally, the company will provide a year of access to Cisco U courses and certifications, covering critical areas like AI, security, and networking.
A Broader Trend in the Tech Industry
The job cuts at Cisco and LinkedIn reflect a broader trend in the tech sector, where companies continue to reassess their workforce in light of evolving technologies and market demands. Cisco previously laid off 4,245 employees in February 2024 and around 6,000 in August 2024, both times citing the need to restructure for AI and security advancements. As the tech landscape shifts, these layoffs signal a critical moment for workers and the industry at large.
The decisions by Cisco and LinkedIn will resonate throughout the tech job market, leaving many employees to navigate an uncertain future as companies adapt to new demands.
For example, Cisco's CFO Mark Patterson stated that the layoffs would result in up to $1 billion of pre-tax charges, with $450 million to be recognized in the fourth quarter of fiscal 2026.