The AI Surge, The Human Cut

Cisco’s latest earnings call was full of optimism. AI infrastructure revenue had doubled. Service contracts were strong. The company positioned itself as a future-proof vendor for the AI era. Wall Street liked what it heard.

And then the layoffs came.

Engineers. Not sales. Not back office. Not contractors. Software engineers.

The same roles companies claim are critical in building and scaling the AI stack.

A strange signal in a familiar pattern

We have seen this before. A company reports growth in its AI line of business. Then it announces a restructuring. And the cuts land squarely on the engineers.

The messaging is always the same. Realignment. Efficiency. Optimizing for strategic goals. But the pattern is unmistakable: AI is no longer additive. It is subtractive. It is being used to justify doing more with less.

And for many engineering teams, that changes the game entirely.

AI is no longer just a tool. It is a budget line.

Let’s be clear. This is not about replacing all developers with AI. That is not what Cisco is doing. But it is about where capital is being allocated.

Companies are betting big on AI infrastructure, AI services, AI integrations. And the talent that built yesterday’s systems is being squeezed to fund tomorrow’s bets. Even when those engineers could be retrained, reassigned, or redirected, they are often being shown the door.

Because AI is no longer a team productivity boost. It is a cost-cutting narrative.

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The illusion of growth without headcount

This is what should worry engineering leaders.

We are entering an era where financial teams and boards see AI not just as acceleration, but as leverage. Fewer people. Faster delivery. Better margins.

In theory, that sounds efficient. In practice, it means teams are shipping more with fewer engineers, less context, and deeper burnout.

When a company lays off engineers during a quarter of record AI growth, the message is not subtle. It says: the value is in the tooling, not the team.

And that message spreads fast.

The new leadership challenge is narrative control

If you are a CTO or VP of Engineering, you are not just managing teams. You are managing morale during a time of strategic whiplash.

You are telling your staff that AI is here to support them, while your CFO is telling the board it can replace them. You are rolling out new tools to help developers move faster, while the org is asking if those tools can help you reduce headcount.

And your senior engineers are watching. Closely.

They know what happened at Cisco. They are reading the tea leaves. And they are asking themselves whether they are building the platform, or just temporarily maintaining it until the AI roadmap gets funded.

This is not fear-mongering. This is pattern recognition.

AI revenue is going up. Engineer headcount is going down. And the companies benefiting most are the ones who are figuring out how to scale AI systems without scaling human teams.

So the question is not just: what can AI do?

It is: what will your company do once it can?

More to come…

✔️ Software engineers among hardest hit in latest Cisco layoffs (IT Pro)

✔️ A.I. Drives Job Cuts at Microsoft, Salesforce and Google (Observer)

✔️ Is AI causing mass layoffs at tech companies? (Euronews)

✔️ You’re Not Imagining It: AI Is Already Taking Tech Jobs (Forbes)