In August 2025, Chuck Robbins went on Mad Money. Jim Cramer asked the CEO of Cisco Systems how he was thinking about AI and the workforce. Robbins sat there in the chair and said this:
“I don’t want to get rid of a bunch of people right now.”
He elaborated. His goal, he said, was for Cisco’s engineers to “innovate faster and be more productive.” He was very clear that Cisco was going to be different. Microsoft was cutting people and blaming AI. Amazon was cutting people and blaming AI. Meta was cutting people and blaming AI. Cisco — Chuck Robbins’s Cisco — was going to use AI to make its workforce stronger, not smaller. He said this on national television. The clip is still on the internet. You can watch him say it.
Five days later, Cisco filed paperwork with California’s Employment Development Department announcing 221 layoffs. Most of them — 157 — were software engineers in Milpitas. The exact people Robbins had just told Jim Cramer he wanted to make more productive, not let go. Notifications went out on August 14, 2025. Terminations were dated October 13.
Nine months later — that’s yesterday — Cisco announced it was firing four thousand more.
Same playbook. Same week as a record-revenue earnings report. $15.84 billion in quarterly revenue, up 12% year-over-year. AI infrastructure orders raised to $9 billion for the year. Stock up 20% on the news. The “less than 5%” of the workforce that’s being eliminated includes — somewhere in there — every single one of the 221 people Robbins had told Cramer he didn’t want to get rid of, plus 3,779 more.
Either Chuck Robbins did not know what was happening inside his own company when he sat across from Jim Cramer in August 2025, or Chuck Robbins did. Pick whichever one is more flattering to him. They are both bad.
Before we go further, the receipts.
This is not Robbins’s first layoff round as CEO. It is his fourth in approximately fifteen months.
February 2024: Cisco lays off roughly 4,250 people — 5% of the workforce. Pre-tax restructuring charges of about $800 million. Robbins tells investors that “our innovation sits at the center of an increasingly connected ecosystem and will play a critical role as our customers adopt AI.” Translation: we are cutting people to focus on AI.
August 2024: Cisco lays off another 7% of the workforce. CFO Scott Herren describes the move as “a reallocation versus a headcount savings.” Hold onto that phrase. It comes back.
August 2025: Robbins goes on Mad Money. Doesn’t want to get rid of people. Days later: 221 cuts, mostly engineers in California.
May 2026: 4,000 more. About 4.6% of global headcount. $1 billion in pre-tax restructuring charges. AI cited as the reason.
In fifteen months — five quarters — Cisco has eliminated something close to ten percent of its global workforce. The CEO has used the words “AI,” “agentic AI era,” “high-growth areas,” “innovate faster,” and “reallocation” interchangeably across all four rounds. The pattern is dense enough that you stop being able to count the individual reorganizations and start seeing the operating model. The operating model is: lay people off, blame AI, raise the AI orders forecast, watch the stock go up.
Yesterday it went up 20%.
OK. Let’s talk about what’s actually changed.
In the Cloudflare layoff one week ago — Matthew Prince, screwdriver line, 1,100 people, “just because you’re fit doesn’t mean you can’t get fitter” — Cloudflare’s stock dropped 23% on the news. Investors saw record revenue plus a 20% layoff and decided the company was being mismanaged. The market punished them.
Yesterday, Cisco did the same thing, on a larger scale, with worse rhetoric, with a four-round track record. The market rewarded them. Twenty percent up in after-hours trading. Roughly $30 billion in market cap added overnight on the news that 4,000 of the company’s own employees would be losing their jobs.
This is the part that should make you put the coffee down.
The market did not used to behave this way. There was, until quite recently, a residual norm in which mass layoffs at profitable companies were treated as a signal of either weak management or weak demand. They moved the stock down. The board got nervous. The CEO had to do a press tour. Sometimes the board replaced the CEO. That was the discipline mechanism.
That discipline mechanism is gone. The Cisco stock chart from yesterday is the obituary.
What the market is now doing — and this matters more than any single CEO — is repricing “AI-justified layoffs at record-revenue companies” as a positive earnings signal. Not a neutral one. A positive one. Twenty percent positive. Which means the next CEO at the next earnings call has now been shown, in real time, what their stock will do if they fire several thousand people and say “agentic AI” enough times in the prepared remarks.
If you are an executive somewhere watching Cisco’s stock chart this morning, you have just received the most expensive lesson Cisco’s outgoing 4,000 employees will ever pay for. You have learned that the layoff is the trigger. You have learned that the AI rhetoric is the safe harbor. You have learned that the 23% drop Cloudflare took was the cost of insufficient discipline in the messaging. Robbins’s people got the messaging right. Robbins’s stock went up. Robbins is the new template.
The CFO line from 2024 — “a reallocation versus a headcount savings” — is worth pulling out and putting on its own page.
Scott Herren, who is still Cisco’s CFO, used that phrase to describe a layoff of 7% of the workforce. The phrase is doing a thing. It is trying to convince you that when thousands of people lose their jobs and Cisco’s headcount drops by thousands, what has happened is “a reallocation” rather than “a headcount savings.” The headcount savings is the thing that happened. The reallocation is the story they want you to use when you write about it.
This is the entire vocabulary of the current layoff cycle and it deserves to be named. “Reallocation.” “Restructuring.” “Reshaping.” “Resizing.” “Reorganizing.” “Realigning.” “Reimagining.” Six of those words appear in Robbins’s memo this week. None of them appear in the email the 4,000 employees got. The 4,000 employees got a more direct word: “impacted.” They were “impacted.” The word was chosen because it converts a transitive verb — “we fired you” — into a passive event — “you were impacted” — that nobody in particular caused. The grammar is structurally exculpatory.
If you find yourself reading a tech-industry layoff memo and you cannot, by the end of the third paragraph, identify who fired whom — the memo is working as designed. The memo is a vehicle for the people who fired you to feel like they did not fire you. The memo is for them, not for you. You already know what happened.
Let’s do the math on the people who did the firing.
Per Cisco’s own SEC filings, the company is taking $1 billion in pre-tax restructuring charges for this round of layoffs. Roughly $450 million will land in fiscal Q4. The rest in subsequent quarters. This figure includes severance, benefits continuation, and other costs of separating 4,000 employees from the company.
Chuck Robbins’s total compensation for fiscal year 2025 was reported at over $52 million.
These two numbers, sitting next to each other, do the rhetorical work that no Substack article can.
Nineteen years of Chuck Robbins, paid at his 2025 rate, equals the severance bill for the layoff he just announced. Or, working the math the other way: Robbins’s single-year compensation is approximately equal to what Cisco is paying in severance for the next 200 employees getting fired. One man’s annual package buys you the goodbye gift bag for two hundred families. This is not a hypothetical. This is on Cisco’s filings. You can pull them.
I will say what I said about Matthew Prince last week: I do not believe Chuck Robbins should be in prison. I do not believe what Chuck Robbins is doing is illegal. I have not seen evidence that he, personally, hates the people he is firing. I would even believe, if pressed, that some part of him feels bad about it. Possibly the part of him that went on Mad Money in August 2025 and meant it when he said he didn’t want to get rid of a bunch of people. Possibly that part of Chuck still exists somewhere in him.
It just doesn’t matter. The $52 million doesn’t care whether Chuck Robbins feels bad. The structure doesn’t care. The market doesn’t care. The board that approved the $52 million doesn’t care. The shareholders who pushed the stock up 20% yesterday on the news of the layoff do not care. They are getting paid, in the most literal and most cynical sense of the word, to not care.
The mechanism that would, in a different country or a different era, have made Chuck Robbins’s August 2025 promise to Jim Cramer matter — that mechanism is gone. The mechanism is the part of capitalism where the CEO’s word is supposed to mean something. It is gone because the market has just decided, with a 20% bid, that it would rather have the layoff than the promise.
This is the moment to talk about what’s actually being argued for here, because the AI defense gets a lot of mileage and it shouldn’t.
Yes, AI tools are improving. Yes, code-generation tools have made software engineers more productive over the last 24 months. Yes, internal-process automation has eliminated entire classes of repetitive work. None of these claims are in dispute. I write a lot about LLMs and agent systems and I would be the last person to tell you they aren’t real.
The question is not whether AI productivity gains are real. The question is what you do with them.
You can take the productivity gain and shorten the workweek. You can take it and lower the price of your product to customers. You can take it and hire more people to chase three more opportunities you previously couldn’t staff. You can take it and pay your existing engineers more, because their output is now demonstrably worth more. You can take it and invest in training, in research, in long-bet projects that don’t have a quarterly return.
Or — and this is the choice Cisco made yesterday, and Cloudflare made last week, and Microsoft made earlier this year, and Meta made before that — you can take it, fire the people whose productivity went up, hand the gain to shareholders as margin expansion, pay the CEO $52 million, and call the firing “agentic AI.”
The AI did not do this. The AI does not make decisions about whether to convert productivity gains into firings or into wages. AI does not write the memo. AI does not sign the severance documents. AI does not approve the $52 million compensation package. A specific small group of named human beings — Chuck Robbins, Cisco’s board of directors, the institutional shareholders that voted for his comp plan — looked at the productivity gain and made a choice. The choice has consequences. The consequences belong to the people who made the choice, not to the technology they invoke to defer responsibility.
When a CEO says “the AI era requires this,” the correct translation is: “we have decided to allocate the productivity gain to ourselves.” That is a sentence with subjects and verbs. Notice that “AI” does not appear in it. The reason “AI” does not appear in it is that “AI” is not actually a participant in the sentence. The participants are Chuck Robbins and his board, on one side, and 4,000 people in San Jose and Bangalore and Tel Aviv and Dublin on the other.
So what do we do.
I will tell you what I am doing, since I have a Substack and a podcast and a small audience and not much else. I am writing the name down. Chuck Robbins. I am writing the date down. May 13, 2026. I am writing the number down. 4,000 people. I am writing the quote down. “I don’t want to get rid of a bunch of people right now.” I am writing the date of the quote down. August 2025. I am writing the comp down. $52 million. I am writing the stock response down. Up 20%.
In ten years, when somebody writes the history of the period in which American technology companies coordinated, in plain view, to extract every productivity gain from artificial intelligence and convert it into a permanent reduction in employed engineers — when somebody writes that history — these are the receipts.
I want them on file. I want them in a form that is searchable. I want them to be there when Chuck Robbins, four years from now, tries to rebrand himself as a thoughtful elder statesman on the speaking circuit, and goes on some other earnings show, and tells some other version of Jim Cramer that he, personally, has always believed AI is about augmentation rather than replacement.
Because Chuck Robbins is not a unique evil. He is a specific evil — he is the man who got on Mad Money in August 2025 and said the words and then fired the people anyway — but the structural problem is bigger than him, and the structural problem will outlive his tenure, and the structural problem will be inherited by his successor, who will give the same speech, on the same network, and fire more people, faster, with cleaner severance documents and better hashtags.
The only counter we have to a structural problem that includes the market, the board, the shareholders, and the press — the only one — is a written record. So write it down. Name them. Quote them. Date the quotes. Compare the quotes to the actions. Make it inconvenient to lie on national television about your relationship to your workforce, because somebody, somewhere, is keeping the receipts.
I’m keeping the receipts.
Gal Ratner is Chief Architect at Prana Entertainment LLC and writes about software, systems, and the tech industry at galratner.com. This is the second piece in a series on the 2026 record-revenue layoff cycle; the first was “Just Because You’re Fit Doesn’t Mean You Can’t Get Fitter,” on Cloudflare.