Despite reporting positive financial news — including record third-quarter revenue of $15.8 billion, a 12% year-over-year increase — Cisco said it will eliminate almost 4,000 jobs.

“We are making changes today that will result in the reduction of our overall workforce in Q4 by fewer than 4,000 jobs, representing less than 5 percent of our total employee base. Most notifications will begin on May 14…” Cisco CEO Chuck Robbins wrote in a blog post about the changes. 

“While we are reducing roles in some areas, we are making clear, strategic investments – particularly in silicon, optics, security, and in our employees’ use of AI across the company,” Robbins wrote. “These investments are building from a position of strength – and focusing on the technologies and businesses that will accelerate our growth, deliver unmatched innovation to customers and partners, and define our future.”

“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,” Robbins wrote. “I’m confident Cisco will be one of those winners. This means making hard decisions – about where we invest, how we’re organized, and how our cost structure reflects the opportunity in front of us.”

On Cisco’s call with financial analysts, executives shared a number of positive results for its fiscal Q3, including:

• Networking product orders grew more than 50% in Q3, led by triple-digit growth in service provider routing and compute, and strong gains across data center switching, campus switching, wireless, enterprise routing, and industrial IoT, Robbins said.
• AI infrastructure orders from hyperscalers reached $1.9 billion in Q3, up from $600 million last year, with a year-to-date total of $5.3 billion exceeding FY26 expectations.
• Full fiscal year 2026 AI infrastructure orders are expected to reach approximately $9 billion, which is 4.5 times FY25 levels, Robbins said.
• Cisco’s Acacia optics business posted more than $1 billion in Q3 orders and is on track for more than 200% growth in FY26, Robbins said. Over 750,000 units of 400G and 40,000 units of 800G coherent pluggable optics shipped, exceeding nearest competitors, Robbins said. “The Acacia business is on fire,” Robbins said.
• Non-hyperscaler AI infrastructure orders from neocloud, sovereign, and enterprise customers totaled approximately $300 million in Q3, with a $3 billion pipeline, Robbins said. “Consistent triple-digit order growth each quarter in FY26, indicating broadening AI adoption beyond hyperscalers,” Robbins noted.

Robbins called out Cisco’s Silicone One architecture and products as contributing to the positive quarter. For example, he noted that the recently introduced Silicon One P200 chip secured three hyperscaler customer wins during Q3 and early Q4, marking Cisco’s first scale-across adoption.

The 51.2 Tbps P200 routing processor features deep buffers and supports Octal Small Form-Factor Pluggable (OSFP) and Quad Small Form-Factor Pluggable Double Density (QSFP-DD) optical form factors that help the box support geographically dispersed AI clusters. A single P200-based system handles the traffic that previously required six 25.6 Tbps fixed systems or a four-slot modular system, Cisco said.

“I’ve said repeatedly on these calls over the last couple of years that as we move to the future, that if you don’t have silicon, you’re going to struggle to be relevant to the hyperscalers. And I think that’s what we’re seeing,” Robbins said. “And so, when you look at the number we put up and the percentage of that, roughly half is systems, which is Silicon One. It’s a massive differentiator for us.”

Another benefit that Silicon One brings to Cisco is supply chain control; Cisco builds the product itself from the ground up, mitigating external supply risks, Cisco CFO Mark Patterson said. “The fact that we design our own Silicon really gives us greater control, end to end,” Patterson said. “The fact that we’re directly managing wafers, substrates, assembly and test really gives us much more control over the supply chain.”

Regarding memory shortages, which are an industry-wide issue, Patterson said there are “20-plus programs that we’ve put into place that are active to reduce the memory utilization across the portfolio.”

One example is in the wireless space. “You’ll see products that will become orderable in Q4 that will actually require 50% less memory. And so that’s a big positive,” he said. In addition, Cisco continues to invest in new capacity, which includes a three-year supply agreement with DRAM supplier Nanya. “That’s going to really help us,” Patterson said.

Cisco’s bread-and-butter networking business is also doing well. Robbins said enterprise data center switching orders grew more than 40% year-over-year and have now grown double digits for seven of the past nine quarters.

“We believe the AI infrastructure opportunity in enterprise is continuing to ramp, as Nexus switch orders tagged for AI deployments were up almost 50% sequentially in Q3,” Robbins said. “Within campus networking, we had record orders in Q3, growing more than 25% year-over-year. We are seeing exceptionally strong demand for our next-generation switching, routing, and wireless portfolio, which continues to ramp faster than prior product launches.”

Research conducted recently with around 3,500 global enterprise technology leaders confirms increased urgency to modernize campus and branch networks. With traffic across these networks expected to increase threefold over the next three years because of AI, 93% of respondents are accelerating their network modernization plans, Robbins noted.

“These findings support our belief that we are still at the start of a multi-year, multi-billion-dollar campus refresh opportunity,” Robbins said.