Cisco announces layoffs days after CEO said it won’t cut jobs in favor of AI
Law firm ‘investigating’ layoffs over alleged notice discrepancy, while Cisco brings in a new channel partner chief
Cisco plans to cut more than 150 employees as part of a new round of layoffs, with the cuts coming days after CEO Chuck Robbins said the company would not be slicing jobs in favor of AI.
The latest cuts include 157 employees at various locations in California. The majority of the cuts are are targeted at Cisco's Milpitas campus, with 64 roles being cut at its site in San Francisco. Staff at its former Redwood City headquarters and some roles at its site in Pleasanton are also set for elimination.
A plethora of roles are set to be axed, including juniors as well as executives with VP titles, among those facing layoffs, according to reports.
News of the layoffs comes after Robbins said he didn’t see the networking giant using AI as an excuse to reduce headcount.
"I don't want to get rid of a bunch of people right now," the CEO told CNBC, instead suggesting he wants the company’s engineers to “innovate faster and be more productive.”
AI was among the reasons Cisco cited for cutting 7% of its workforce last August, a decision CFO Scott Herren suggested at the time was more akin to “a reallocation versus a headcount savings.”
Those cuts followed a 5% reduction of Cisco’s global workforce in February 2024, a restructuring move the vendor suggested at the time would maximize shareholder returns.
Did Cisco break the law?
Its latest round of layoffs is, however, being probed by a law firm over claims the company could have violated U.S. labor laws.
Chicago-based law firm Strauss Borrelli said it was looking into layoffs at the networking giant, suggesting Cisco employees facing layoffs may be owed 60 days of severance pay and benefits.
Under the Worker Adjustment and Retraining Notification (WARN) Act, U.S. employers are required to provide 60 days' notice before mass layoffs. The law firm is investigating whether a WARN Notice was filed with the state of California at least 60 days before the mid-October job eliminations, as affected staff were reportedly only notified on August 13 – despite the dates appearing to line up.
“We are investigating whether Cisco failed to provide at least 60 days’ notice before laying off 157 employees and, therefore, violated the WARN Act,” the law firm said in a statement.
Cisco last week reported earnings that saw it bring in $800 million in AI-related revenues for the fourth quarter of its fiscal 2025, which pushed its full fiscal-year AI-related haul to $2.1 billion.
Robbins told investors that largely all of its AI growth was coming from hyperscaler customers, with two-thirds of AI-related orders tied to Cisco systems, with the remaining one-third tied to its optics portfolio.