“The heavy cuts, which sources said will range between 9,000 and 14,000 employees worldwide, stem from Cisco’s transition from its hardware roots into a software-centric organization”, CRN wrote. Cisco spokeswoman Andrea Duffy did not comment on the report, according to Bloomberg. The company’s shift to a “software-defined future” means that it requires “different skill sets” in order to capture a higher share of the market and boost its profit margins, CRN’s report said.
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The San Jose, California-based company said it will reinvest all the cost savings from the restructuring plan, which will begin in the current quarter, into businesses such as security, connected devices, data-center products and the cloud. Reports earlier in the day said Cisco was likely to cut as many as 14,000 jobs.
Cisco, which makes routers and switches, said revenues for the fourth quarter dropped slightly to $12.64 billion from $12.84 billion past year.
In 2013, the company announced another round of 4,000 job cuts.
The cuts are the result of Cisco trying to make the move from its old hardware business – including the big routers for the telcos – to software and services, and to the “cloud”. In September 2015, HP announced that it expected to slash 33,300 jobs over the period of next three years.
Robbins has had some success in changing Cisco’s focus, and the company projected sales growth of around 3% for the fiscal fourth quarter.
Every summer from 2011 through 2014, with icy routine, when Cisco (NASDAQ:CSCO) was closing out its fiscal year, it revealed mass job cuts.
Cisco has an estimated 5,000 staff in 14 towns and cities across the United Kingdom, but it is not known how many British employees will be affected by the cuts.
In a note to investors, Jeffries analyst George Notter says the firm will maintain its buy rating on Cisco, claiming the layoffs aren’t necessarily a negative sign for the company’s progress.
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In after-hours trading, Cisco shares were off by nearly 1 percent at $30.47. Orders from service providers fell 5 percent, while revenue in emerging markets fell 6 percent, Cisco said.
