United States internet gear maker, Cisco Systems, said on Wednesday it would eliminate up to 5,500 job positions, about 7 percent of its global workforce under its restructuring plan.
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Cisco will start implementing the restructuring plan from the first quarter of fiscal 2017.
That’s a big task given switching and routing still comprised almost half of Cisco’s revenue past year.
The layoffs will hit some of Cisco’s smaller and more mature business areas where long-term growth prospects are low, the company said.
U.S. technology firm Cisco is to cut around 5,500 jobs from its global workforce.
Overall, the company’s revenue saw an increase of 3% to $48.7bn in the fiscal year ending 30 July, while net profit rose 7% to $12bn. This also beat the analyst estimates of 60 cents per share. They had earlier fallen 1.3 per cent to US$30.72, leaving them up 13 per cent this year. Reports earlier in the day said Cisco was likely to cut as many as 14,000 jobs.
Robbins, who replaced John Chambers in July past year, has been steering the company toward more software and subscription-based services, states a Reuters report.
The corporate restructuring was meant to cut expenses in “lower growth areas” and shift the money into Cisco priorities such as security, cloud computing, data centres, and the internet of things, according to Robbins. Innovation is being made at an incredible pace, forcing companies to adapt their businesses and venture into new directions to be able to stay afloat.
Looking ahead, Cisco states that it is expected revenue for its next quarter to be between -1-1% growth, a Non-GAAP gross margin rate of 63-64%, and a Non-GAAP EPS of $0.58-$0.60.
Revenue for the company’s fiscal fourth quarter fell to $12.64 billion from $12.84 billion in the corresponding quarter previous year.
In the fourth quarter revenue from the router unit fell 6%, while revenue at the switch unit grew by only 2%.
“Cisco is plodding along”, said David Heger, an analyst at Edward Jones & Co.
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The London office houses more than 200 employees, and is one of 14 offices that Cisco has in the UK. The company last announced a large round of firings in August 2014, when it eliminated about 6,000 positions.
