Cisco Systems Inc. reported record third-quarter revenue of $15.8 billion [1] on Wednesday, driven by a surge in artificial intelligence orders.
The results signal a pivotal shift for the networking giant as it attempts to pivot its core business toward the infrastructure requirements of the AI era. While the financial growth is significant, the company is simultaneously restructuring its workforce to accelerate this strategic transition.
AI orders reached $9 billion [1], nearly doubling previous figures and allowing the company to beat analyst expectations. This demand for AI-related networking equipment pushed the company's stock higher on Thursday. Share prices rose more than 13 percent [2], though some reports indicate a surge of about 20 percent in extended trading [3].
Despite the record revenue, Cisco announced it will fire thousands of employees [4]. The company expects to eliminate fewer than 4,000 positions, which represents under five percent of its total workforce [3]. These cuts come as the company accelerates its AI push to maintain its position in the critical infrastructure market.
Chief executive officer Chuck Robbins said the company is focusing on its role in providing the foundation for AI deployment. The surge in revenue reflects a broader trend of enterprises investing in the hardware necessary to support large-scale AI models, and data processing.
The company's financial performance on Wednesday and the subsequent stock reaction on Thursday highlight the market's sensitivity to AI-driven growth. By aligning its workforce and product offerings with these demands, Cisco aims to capture a larger share of the emerging AI infrastructure market.
“Cisco reported record third-quarter revenue of $15.8 billion”
Cisco's simultaneous record earnings and workforce reductions illustrate a classic corporate pivot. The company is shedding legacy operational costs to reinvest in high-growth AI networking, betting that the massive capital expenditure currently flowing into AI data centers will create a long-term revenue floor for the firm.
