Cisco Systems, headquartered in San Jose, California, announced plans to lay off nearly 4,000 employees, which is less than 5% of its global workforce. This decision comes after the company reported a record revenue of $15.8 billion for the third quarter of fiscal year 2026, exceeding Wall Street expectations. The layoffs are part of Cisco's strategy to pivot towards artificial intelligence (AI), a move that CEO Chuck Robbins believes will position the company for future success. Despite strong earnings, Cisco is shifting investments to high-demand areas like AI, security, and networking. The company has secured $5.3 billion in AI infrastructure orders so far this year and expects this to rise to $9 billion by the end of FY2026. Cisco plans to notify employees about layoffs starting May 14 and will provide severance packages and job placement assistance to those affected. The restructuring plan is expected to incur pre-tax charges of up to $1 billion, with approximately $450 million of these costs recognized in the next quarter.