Cisco cuts 4,000 jobs and bets big on infrastructural AI

The timeline of an announced restructuring

On May 14, 2026, Cisco confirmed the elimination of almost 4,000 jobs. According to TechCrunch , the CEO contextualized the decision with positive growth data. In fact, the company recorded record quarterly revenues in the same period.

However, this is not Cisco's first recent restructuring. In 2024 and 2025, the company had already initiated staff reduction cycles. Consequently, the pattern is clear: Cisco is compressing traditional operational areas to fund the transition towards AI.

Specifically, resources are being reallocated on three fronts. First, the internal development of AI-native solutions for networking. Second, the integration of machine learning into the security platform. Third, potential strategic acquisitions in the network observability and automation segment.

Record revenues and simultaneous cuts: a paradox only apparent

At first glance, cutting thousands of employees while announcing record revenues seems contradictory. In reality, this model has become standard in the global tech industry. Therefore, it is worth analyzing it carefully.

Large technology companies today operate with a logic of portfolio shift . Some business units mature and generate cash. Other emerging units require massive investments. Consequently, cuts do not signal weakness, but reallocation of human and financial capital.

Similarly, McKinsey has documented how companies investing in infrastructure AI tend to compress operating costs in the short term to accelerate growth in the medium term. Cisco is following this trajectory exactly.

What Cisco is building with these investments

Cisco's strategic direction aims at AI-driven networking. In summary, the goal is to make business networks capable of self-optimizing, detecting anomalies, and responding to security incidents autonomously.

In addition to this, Cisco is enhancing its Splunk platform, acquired last year for about $28 billion. The integration of Splunk with Cisco's AI capabilities creates a very competitive observability and security stack. Therefore, the market for cloud security enterprise is destined to change rapidly.

Finally, Gartner predicts that by 2027, over 60% of new enterprise network implementations will include AI-native components. Cisco is positioning itself to capture this demand early.

Winners and losers in the new ecosystem

In this scenario, not all market players are in the same position. Therefore, it is useful to distinguish who gains and who risks losing ground.

Potential winners are the system integrators capable of working with advanced Cisco stacks. Among these, even SMEs adopting cloud-first network and security solutions can benefit from smarter, more automated products. Furthermore, certified Cisco partners who invest in AI training today will have a significant competitive advantage in the next 18-24 months.

Potential losers are the companies that remain anchored to legacy infrastructure. Unlike those who update, these realities will find themselves managing systems that are increasingly less supported and more vulnerable. For this reason, the pressure towards technological modernization will increase further.

Among other things, Cisco's competitors — such as Juniper Networks, Palo Alto Networks, and Fortinet — are accelerating their AI roadmaps. Consequently, the market as a whole will move faster than many Italian SMEs had anticipated.

SHM Studio's take: what changes for Italian SMEs

We at SHM Studio we are carefully following these strategic moves. The reason is simple: the decisions of big tech vendors translate, within 12-18 months, into concrete changes in the offering available to SMEs.

Specifically, we identify three operational implications for Italian B2B and retail companies. First of all, the cost of AI-assisted cloud security solutions will tend to decrease in the medium term as Cisco scales production. However, in the short term, the transition will require investment in training and specialized consulting.

Furthermore, SMEs managing hybrid infrastructures — partly on-premise, partly cloud — will need to review their network architectures. This doesn't necessarily mean replacing all existing hardware. Instead, it means planning an upgrade roadmap consistent with the new AI capabilities available.

Finally, the dimension of digital presence and that of technological infrastructure are increasingly interconnected. A company that invests in SEO , google ads campaigns or LinkedIn campaigns must be able to count on a reliable and secure technological base.

The work in progress: where Cisco has not yet responded

Despite this, some open questions remain that the market will have to resolve in the coming quarters. The first concerns the compatibility of new AI solutions with existing installations. Cisco has historically ensured good backward compatibility, but the speed of the AI transition could create discontinuities.

The second issue concerns the pricing model. AI-native solutions tend to move towards subscriptions and recurring licenses. Therefore, SMEs accustomed to one-off hardware investments will need to review their IT budget models.

Third, and perhaps most importantly, there's the issue of internal skills. Harvard Business Review has highlighted that the main obstacle to adopting AI in companies isn't technological, but organizational. Therefore, even the best Cisco infrastructures won't produce value without people capable of interpreting their data.

Next moves: what's worth doing now

For Italian SMEs operating in B2B or structured retail contexts, this moment requires a clear-eyed assessment. It's not about chasing every new technology. It's about understanding which investments make sense in your specific context.

First, it is useful to map the current state of your network and security infrastructure. Many medium-sized companies do not have a clear view of what they have installed and when. This mapping is the starting point for any informed decision.

Subsequently, it is advisable to talk to your technology partners to understand how Cisco's innovations will impact existing contracts and service levels. Furthermore, it is worth exploring the opportunities related to applied artificial intelligence to marketing and communication processes, which go hand in hand with infrastructural evolutions.

We at SHM Studio we support SMEs on this strategic guidance path. From the analysis of the web presence to the definition of strategies of SEO content , our approach integrates the digital dimension with careful analysis of market technological evolutions. To learn more, you can consult our Blog or contact us directly .