Cisco Systems has announced plans to cut 6,000 jobs, or 8% of its workforce, as part of a plan to shift resources to growth segments.
The company plans to implement the layoffs to free up room for new specialist hires in businesses including cloud computing, software and security, IDG News Servicesaid. Cisco will set aside around $700 million to pay for the reorganization.
Bloombergnotes that Cisco has now cut 25,850 positions since 2009, but has also increased its overall headcount by 8,000 over this time.
Cisco announced the job cut plan as it reveals it is expecting just a flat to 1% increase in revenue for the October quarter to between $12.1 billion and $12.2 billion.
For the July quarter, Cisco's revenue was flat year-on-year at $12.4 billion, while net income fell 1% to $2.2 billion. The decline was not as steep as analysts had been anticipating.
“We are executing well in a tough environment,” Cisco CEO John Chambers commented. “We are focused on growth, innovation and talent, especially in the areas of security, data center, software, cloud and internet of everything.”
Core routing sales fell 7% and switching sales declined 4%, but software sales surged 29% and data center equipment sales increased 30%.