As per the latest update, CISCO will cut 5500 jobs. Or 7% of its global workforce. It will begin in the current quarter, from a workforce of more than 73,700 at the end of April, Cisco said Wednesday in a statement.
The company will invest any savings from this reduction to the area, where CISCO may grow quickly. For example, cloud computing and connected devices.
CEO Chuck Robbins took over in July 2015. He has been working to rekindle growth by shifting Cisco’s offerings toward software-based networking, security and management products. Which customers increasingly prefer because they’re less expensive and more versatile.
“We had another strong quarter, wrapping up a great year. I am particularly pleased with our performance in priority areas. Including security, data center switching, collaboration, services as well as our performance, with revenues up 2% in Q4 excluding the SP Video CPE business.”
“We continue to execute well in a challenging macro environment. Despite slowing in our Service Provider business and Emerging Markets after three consecutive quarters of growth, the balance of the business was healthy with 5% order growth.
“This growth and balance demonstrate the strength of our diverse portfolio. Our product deferred revenue from software and subscriptions grew 33% showing the continued momentum of our business model transformation.”
“We are looking at the areas where we believe growth will come faster”. Robbins said in a conference call. “It’s not that we’re ignoring one in favor of another. We just want to make sure our investments are commensurate with the growth opportunity.”
Though CISCO did not confirm where in the world the job cuts would mostly fall. But they promised to “reinvest substantially all the cost savings” into its future growth areas “aggressively”. The jobs losses will cost Cisco about $700m in termination payments, will be early in 2017.