“Cisco regularly evaluates its business and will always make the changes necessary to effectively manage our portfolio and drive the most value for our customers and shareholders,” the company said in a statement to Bloomberg. “As a result, this can mean realigning some areas so that we can invest in others such as security, data center/cloud and networking.”
Cisco said it would lay off 1,100 from its workforce. Those job cuts, which are part of a broader restructuring plan, come on top of the 5,500 layoffs Cisco announced in August 2016. However, the vendor did not say if these latest layoffs at its headquarters are related.
revenue was $12.1 billion, down 4%, with product revenue down 5% and service revenue up 1%.
In the fourth quarter, Cisco generated 31% of its total revenue from recurring offers, an increase of almost four points from a year ago. Revenue from subscriptions increased 18% and now represents over 50% of the vendor’s software revenue. However, total product orders for the fourth quarter were flat.
Cisco is hoping that its new line of Catalyst 9000 switches and the intent-based networking concept—one that it is currently vetting with its largest enterprise customers—could boost switching revenues.
But Cisco is hardly alone in being forced to make job cuts. A separate Bloomberg report emerged that Hewlett Packard Enterprise (HPE) plans to ax about 10% of its employee base, or at least 5,000 workers, citing people familiar with the matter. HPE’s job cuts are part of a broader effort to reduce expenses.