Cisco Systems said it is cutting an additional 1,100 employees as the company endures a sales slump and continues its path to becoming a more software and services-oriented company.
The latest round of cuts, expected to be mostly completed by the end of Q1 of Cisco’s fiscal 2018, is in addition to the 5,500-job layoff it announced last August that, at the time, represented about 7% of Cisco’s workforce.
But the severity of those numbers is somewhat misleading. Cisco CEO Chuck Robins told The Wall Street Journal that the company’s headcount is actually higher now than it was when it announced the restructuring plan last August.
Cisco this month extended that restructuring plan to include an additional 1,100 employees, with $150 million of estimated additional pretax charges.
The new cuts came as Cisco announced fiscal Q3 revenues of $11.9 billion, down 1%.
Though switching revenue rose by 2%, several other areas saw revenue declines. Notably, Cisco’s Service Provider Video segment revenue plummeted 30% to $207 million in the period. A bright spot was Security, where revenues rose 9%, to $527 million.
Looking ahead to fiscal Q4, Cisco expects to post a 4% to 6% drop in revenue, and non-GAAP earnings per share of 46 cents to 51 cents, off by a range of 11 cents to 14 cents per share.
Cisco shares were down $2.60 (7.69%) to $31.22 each in after-hours trading Wednesday.
Cisco is preaching patience with its shifting business and product focus.
"I am pleased with the progress we are making on the multi-year transformation of our business," Robbins said, in a statement. "The Network is becoming even more critical to business success as our customers add billions of new connections to their enterprises. We are laser focused on delivering unparalleled value through highly secure, software-defined, automated and intelligent infrastructure."