After we reported yesterday on analyst projections that Cisco Systems was likely to layoff about 14,000 employees, the world's biggest networking equipment company issued an announcement on Wednesday of a "limited restructuring." The figure is, in fact, 5,500 jobs, or seven percent of its global workforce. The cuts will begin in its fiscal year 2017.
In making the announcement, CEO Chuck Robbins told CNBC on Thursday that the company is shifting its focus to key priority areas such as security, Internet of Things, collaboration and cloud services.
In a prepared statement sent to SCMagazine.com on Thursday:
"Today's market requires Cisco and our customers to be decisive, move with greater speed and drive more innovation than we've seen in our history. Today, we announced a restructuring enabling us to optimize our cost base in lower growth areas of our portfolio and further invest in key priority areas such as security, IoT, collaboration, next generation data center and cloud. We expect to reinvest substantially all of the cost savings from these actions back into these businesses and will continue to aggressively invest to focus on our areas of future growth. The restructuring will eliminate up to 5,500 positions, representing approximately 7 percent of our global workforce, and we will take action under this plan beginning in the first quarter of fiscal 2017."
This report was updated on Thursday to add commentary from Cisco.