Cisco Systems has announced a fresh round of job cuts, eliminating 157 roles in California, just days after chief executive Chuck Robbins publicly dismissed the notion of cutting staff to make way for artificial intelligence. The move has triggered legal scrutiny, adding further tension to the company’s efforts to balance cost control, shareholder returns and a push into AI-driven growth.
The cuts will affect employees at several Cisco sites, with the largest concentration at its Milpitas campus. A further 64 jobs will go in San Francisco, while staff at the company’s former Redwood City headquarters and its Pleasanton office are also impacted, reported CRN. The roles being eliminated span a wide range, from junior employees to senior executives, including vice-presidents, according to reports.
The timing of the layoffs has raised eyebrows. Only last week, Robbins told CNBC he did not intend to use AI as a pretext for reducing headcount. “I don’t want to get rid of a bunch of people right now,” he said, emphasising that he wanted engineers to “innovate faster and be more productive” instead.
Cisco’s chief financial officer, Scott Herren, had previously described job cuts linked to AI adoption as a “reallocation versus a headcount savings” exercise. But the latest round follows two major workforce reductions within the past year – a 7% cut announced in August 2024, and a 5% global reduction in February 2024, which the company said would maximise shareholder value.
The new redundancies may now be tested in court. Chicago-based law firm Strauss Borrelli has announced it is investigating whether Cisco complied with the Worker Adjustment and Retraining Notification (WARN) Act, which requires U.S. employers to provide 60 days’ notice before implementing mass layoffs.
In a statement, the firm said it was probing whether affected Cisco employees had received sufficient notice and were entitled to 60 days’ severance pay and benefits. Reports suggest staff were informed of the cuts on 13 August, ahead of job eliminations slated for mid-October. While the dates appear to fall within WARN’s requirements, the law firm has questioned whether proper procedures were followed.
“We are investigating whether Cisco failed to provide at least 60 days’ notice before laying off 157 employees and, therefore, violated the WARN Act,” Strauss Borrelli said.
The company has not publicly commented on the legal inquiry.
The layoffs coincide with strong growth in Cisco’s AI-linked business. The company recently reported $800 million in AI-related revenues for the fourth quarter of fiscal 2025, taking its annual total to $2.1 billion. Robbins told investors that the bulk of this revenue came from hyperscaler customers, with two-thirds tied to Cisco’s systems and the remainder linked to its optics portfolio.
The financial boost underscores Cisco’s strategic bet on AI infrastructure as a long-term growth engine. But it also highlights the contradiction between cutting jobs while simultaneously touting record revenues from one of the industry’s fastest-growing sectors.
Alongside the job cuts, Cisco has announced changes to its leadership ranks. Tim Coogan, senior vice-president for U.S. commercial operations, will take over as global partner sales chief following the departure of Rodney Clark, reported CRN.
Coogan, a 25-year veteran of the company, signalled his commitment to Cisco’s partner ecosystem in a LinkedIn post, writing: “Our partners fuel more than 90% of Cisco’s business, and I’m energised to build on this strong foundation to deliver even greater impact together.”
The leadership change comes as Cisco prepares to roll out its new Cisco 360 Partner Program, due to launch next February. The revamped structure will scrap the long-standing “Gold” partner designation in favour of a simpler two-tier system: “Cisco Partner” and “Cisco Preferred Partner.” The overhaul has already sparked concern among partners who invested heavily in achieving the outgoing tiers.