Cisco to cut up to 5,500 jobs

Cisco has revealed plans to cut up to 5,500 jobs after reporting flat revenue for its full financial year a 2% decline in revenue for the fourth quarter.

The networking vendor said it will restructure to cut costs in lower growth areas, and allow it to focus its investment on priority areas including IoT, next generation data centers and the cloud.

The restructuring will eliminate up to 5,500 positions, or around 7% of Cisco’s total global workforce. It will commence this quarter.

Cisco made the announcement as it revealed that revenue for FY16 was flat at $49.2 billion. Excluding the contribution of Cisco’s service provider video CPE equipment, which Cisco sold to Technicolor for $600 million last year, revenue would have grown 2%.

Likewise, Cisco’s Q2 revenue declined 2% year-on-year to $12.6 billion, but grew 2% excluding video CPE revenues.

Net income grew 20% for the full year to $10.7 billion, and 21% in the fourth quarter to $2.8 billion.

“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,” Cisco CEO Chuck Robbins said.

“This growth and balance demonstrates 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.”