Cisco, the prominent technology company, has announced plans to reduce its global workforce by approximately 4,000 employees, representing about 5% of its total staff. This significant restructuring comes despite the networking equipment giant reporting better-than-expected profit and revenue figures for its fiscal third quarter.

The company stated that these job cuts are part of a strategic initiative to reconfigure its cost structure and channel greater investment into the burgeoning fields of artificial intelligence (AI) and cybersecurity. This move aligns with a broader trend observed across the tech sector, where several major firms, including Cloudflare and General Motors, have recently downsized their workforces, often citing a renewed focus on AI spending as a key driver, even when reporting robust financial performance.

Cisco’s heightened emphasis on cybersecurity is particularly notable, given its recent history of confronting various security vulnerabilities. The company has grappled with issues in its routers and firewalls that have, on occasion, enabled unauthorized access to the networks of corporate clients, including the U.S. government. Furthermore, Cisco experienced a data breach last year that compromised customers’ personal information, underscoring the critical need for enhanced security measures.

In a recent communication, Cisco’s Chief Executive, Chuck Robbins, highlighted the company’s achievement of “record revenue” and “double-digit growth,” while also acknowledging the strategic investments being made in integrating AI across the organization and empowering employees with AI tools. Robbins, whose executive compensation is projected to exceed $52 million in 2025, has not indicated any plans to reduce his own earnings. These latest reductions in staff are not an isolated event, as Cisco has undertaken several rounds of layoffs in recent years, impacting thousands of employees.