Cisco reported record quarterly revenue of $14.6 billion this week. Hours later, it announced it’s cutting nearly 4,000 jobs.

The company’s CFO was quick to clarify that the layoffs aren’t about saving money. They’re about reallocation. Cisco wants to spend more on AI, and that means shifting resources away from other parts of the business.

This isn’t Cisco’s first restructuring in recent years. The company has been steadily trimming its workforce while investing heavily in AI infrastructure and software. CEO Chuck Robbins has been vocal about the growth opportunity he sees in AI, particularly around networking equipment for data centers and AI-powered security tools.

What makes this moment notable isn’t that Cisco is laying people off. It’s that the company felt comfortable announcing job cuts on the same day it celebrated record revenue. That tells you something about how normalized this pattern has become in tech.

The Broader Pattern

Cisco isn’t alone. Meta just announced it’s cutting roughly 10 percent of its staff next week, even as the company posts record profits. According to current and former employees who spoke with WIRED, morale inside Meta is at an all-time low. The company is making more money than ever, but “everyone is unhappy.”

Microsoft is also pulling back in a different way. After spending six months encouraging thousands of its own employees to use Claude Code, Anthropic’s AI coding tool, the company is now quietly canceling licenses. Sources say Claude Code became popular inside Microsoft, particularly among project managers and designers who don’t normally write code. But apparently it became too popular, and Microsoft is walking it back.

Then there’s SpaceXAI, Elon Musk’s newly merged entity combining SpaceX and xAI. More than 50 employees have left since the merger in February. Insiders point to burnout, leadership changes, and talent poaching. Some speculate that liquidity events from the merger weakened retention incentives. People got paid and left.

What It Means

The tech industry is in a strange place right now. Companies are profitable. Revenue is growing. But they’re still cutting staff and pulling back on initiatives that seemed like priorities just months ago.

Part of this is about AI. Companies want to free up budget to invest in models, infrastructure, and AI-specific talent. But part of it is also about efficiency. Tech companies spent the last decade hiring aggressively. Now they’re correcting course, even when they don’t need to for financial reasons.

The Cisco announcement is the clearest example yet. The company doesn’t need to save money. It just wants to spend differently. And it’s willing to cut thousands of jobs to do it.

For workers, this is a difficult environment. Job security isn’t tied to company performance anymore. A company can have record revenue and still decide your role isn’t strategic. That’s the new normal.

One Bright Spot

Not everything is bleak. Cerebras, the AI chip startup, raised $5.5 billion in what became the first major tech IPO of 2026. The stock jumped 108% on its first day of trading. A year ago, it looked like Cerebras might not make it to an IPO at all. Now it’s one of the biggest hardware success stories in AI.

The Cerebras IPO shows there’s still appetite for growth stories in AI infrastructure. Investors want exposure to the companies building the picks and shovels, not just the ones using them.

But for most tech workers, the Cerebras story is the exception. The Cisco story is the rule. Revenue growth doesn’t mean job security. Profit doesn’t mean stability. And even tools that employees love, like Claude Code at Microsoft, can disappear without warning if the company decides priorities have shifted.