Cisco Systems announced Wednesday a reorganization plan that will result in the elimination of up to 5,500 jobs, or 7% of its workforce -- far fewer than the 9,000 to 14,000 that CRN reported on Tuesday.
Cisco said the reorg will help it “optimize our cost base in lower growth areas” and invest more in “key priority areas” such as security, the Internet of Things, collaboration, and next-gen data center and cloud products and technologies. Cisco, which is also shifting focus as customers move toward software-based off-the-shelf platforms and away from purpose-built hardware, said it will “take action under this plan” in Q1 of its fiscal 2017.
Cisco posted Q4 revenues of $12.6 billion, up 2%, on net income of $2.8 billion, or 56 cents per share. Revenues excluded Cisco’s service provider video CPE business. Cisco sold its set-top and CPE business to Technicolor late last year.
Q4 revenues at Cisco’s Service Provider Video unit dipped 12%, to $444 million, and represented just 4% of total revenues in the period.
Cisco expects Q1 revenues to be down 1% to up 1% year-on-year, with GAAP earnings of 42 cents to 47 cents.
Cisco shares were down 37 cents (1.20%) to $30.35 each in after-hours trading Wednesday.