Cisco to lay off up to 5,500 workers

Cisco plans to cut as many as 5,500 jobs, the company said today. The world’s largest maker of internet routers said it wants to cut costs in order to be able to invest more in the internet of things, security solutions, and cloud technologies.
Headcount at Cisco stood at 73,104 as of April, so 5,500 jobs represents about 7% of Cisco’s workforce. The company has been in the process of realigning its workforce for several years, as it replaces some employees from legacy lines of business with software developers. Two years ago when the company said it would cut 6,000 jobs, headcount stood at roughly 75,000. Cisco’s total number of employees has declined by about 2,000 since that time.
This marks the fourth time in recent years that the company has ended the summer with layoff announcements. The 6,000 cuts announced in 2014 followed 4,000 job cuts announced a year earlier, and 11,500 cuts announced in 2011.
Earlier this summer, the company lost four key executives when Mario Mazzola, Prem Jain, Luca Cafiero and Soni Jiandani decided to leave the company. CEO Chuck Robbins reportedly said their departures were due to a “disconnect regarding roles.”
For its fiscal year 2016, Cisco reported $12.6 billion in revenue and $2.8 billion in net income. The company said its service provider business slowed down after three consecutive quarters of growth.
“I am particularly pleased with our performance in priority areas including security, data center switching, collaboration, services as well as our overall performance, with revenues up 2% in Q4 excluding the SP Video CPE business,” said Cisco CEO Chuck Robbins. “We continue to execute well in a challenging macro environment.”
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