"The question with Cisco is the same question as with other tech companies that have cut staff because of AI business improvements. The best example is Block (NYSE: SQ), which cut 40% of its staff in February. Are the AI layoffs a screen to cut costs and drive up earnings? Or, are AI-based work systems remarkably good for some companies? With most of the companies laying people off, it will be hard to tell."
Cisco announced plans to cut 4,000 jobs as it shifts business toward AI. Cisco described itself as critical infrastructure for the AI era and linked its technology leadership and customer trust to innovation at speed and scale. In the most recently announced quarter, revenue rose 12% to $15.8 billion and EPS rose 37% to $0.85. The results were viewed as acceptable but not spectacular compared with larger industry leaders. The job cuts were attributed to hyperscaler capex spilling downstream. The announcement lifted the stock by 15%, while broader questions remain about whether AI-driven changes replace jobs or primarily reduce costs.
Read at 24/7 Wall St.
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