In a period marked by widespread layoffs in the tech sector, Cisco CEO Chuck Robbins is taking a different approach, stating, “I don’t want to get rid of a bunch of people right now.” While many companies, including major players like Microsoft and Amazon, are using AI as a justification for workforce reductions, Cisco is focusing on leveraging AI to enhance employee productivity and innovation.
Robbins emphasized that his goal is to help existing engineers “innovate faster and be more productive,” which he believes will give the company a competitive advantage. This strategy is in stark contrast to the trend of cost-cutting through layoffs. While Robbins did not completely rule out the possibility of future job cuts “down the road,” he clarified that the immediate focus is on upskilling and empowering the current workforce. Cisco’s approach is underpinned by its recent financial success, with the company beating both earnings and revenue expectations in its latest quarterly results. A significant driver of this performance is a massive increase in demand for its AI infrastructure, particularly from major tech companies, or “webscale customers,” that are rapidly building out their AI capabilities.
The company has more than doubled its initial $1 billion AI infrastructure order target for fiscal year 2025. This focus on providing the foundational technology for the AI revolution, rather than simply adopting AI to replace human workers, seems to be a key part of its strategy. By selling the “picks and shovels” of the AI gold rush, Cisco is positioning itself for growth while maintaining a more stable internal workforce. The company’s recent acquisition of the cybersecurity platform Splunk further underscores its shift toward a more agile, software-and-services-oriented business model, aimed at supporting its customers’ AI initiatives.
Cisco’s strategy highlights a crucial distinction in the AI era: the potential for AI to be a tool for augmentation and growth, rather than just a means of cost reduction. This could serve as a model for other companies looking to navigate the complexities of AI adoption without sacrificing their human capital.
