Cisco Systems has reported one of the strongest quarters in its history while simultaneously announcing plans to cut nearly 4,000 jobs, a combination that sent its stock surging by as much as 17% on 14 May 2026, its biggest single-day rally since 2002. The results and the restructuring together tell a single story: Cisco is betting everything on artificial intelligence infrastructure and reorganising its entire business around that bet.

The company reported Q3 FY2026 revenue of $15.84 billion, up 12% year-on-year and ahead of the $15.56 billion Wall Street had expected. Net income rose to $3.37 billion from $2.49 billion a year earlier. Adjusted earnings per share came in at $1.06, beating consensus estimates of $1.04.

AI Is Now the Business

The headline number from the results was not the revenue beat but the AI order update. Cisco raised its full-year AI infrastructure order target from $5 billion to $9 billion, having already secured $5.3 billion year to date. Hyperscaler AI orders more than doubled compared to Q3 2025. Product orders overall jumped 35% year-on-year, with networking product orders accelerating beyond 50%.

CEO Chuck Robbins told CNBC that Cisco is entering what he described as a "networking supercycle," driven by soaring demand for the infrastructure needed to run AI data centres. "AI is not just about chips," Robbins said. "Someone has to sell the pipes that move all that data." Cisco is positioning itself as one of those critical pipe builders, supplying switches, routers, silicon, and optics to the hyperscalers building the world's AI compute infrastructure.



The Layoffs

The 4,000 job cuts, representing approximately 5% of Cisco's global workforce, began on 14 May 2026. Robbins framed them not as a response to weak demand but as a deliberate reallocation of resources toward higher-growth AI-focused segments. "The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest," he wrote in a blog post.

The restructuring is expected to cost up to $1 billion, including approximately $450 million in the current quarter. Affected employees will receive one year of free Cisco training as part of their severance package.

What It Means for Africa

Cisco operates across Nigeria, South Africa, Kenya, and Egypt through a network of partners and enterprise clients. Its networking infrastructure underpins data centres, corporate networks, and government systems across the continent. As African enterprises and telcos accelerate their own AI infrastructure investments, Cisco's renewed focus on AI-grade networking hardware and software is directly relevant to the upgrade cycles now beginning across Africa's largest digital markets.