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Cisco job cuts made to address growth areas

Chuck Robbins, CEO of Cisco Systems

Cisco Systems Inc. will trim more than 5,500 jobs from its workforce is a sign it is in a restructuring phase, according to the networking giant.

Cisco this week released its fiscal results for the latest quarter, with its revenue growing by only two per cent compared to the same time last year. In a statement on Wednesday, the cuts — which represent about seven per cent of the global workforce — will enable the firm 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,” the company said in a statement.

The San Jose-based network equipment manufacturer has been working to expand beyond its legacy networking business and focus more on security and cloud products; revenue in the company’s switching and routing business units have been weakening as more enterprises look towards the cloud and managed services for their computing and networking requirements.

At its Cisco Live event this past July, CEO Chuck Robbins said the company is looking at acquisitions — including its recent purchase of cloud and the Internet of Things (IoT) solution provider Jasper Technologies — and a move towards subscription-based models for growth.

Customers are embracing mobility, cloud, analytics, and IoT as they look to digitize business operations — and the IT network needs to be “digital ready” to meet these needs, Robbins said at the time.

A source close to the situation at Cisco told CDN that the Canadian operation went virtually unscathed. Only 40 people were impacted at Cisco Canada. Those cuts came from the sales, SE and service departments. The same source added that a good percentage of the cuts came from acquisitions made by Cisco in the past year. The source also said that Cisco did this round of staff cuts to focus more on growth areas such as security and cloud.

The vendor focused on the issue of security at the recently concluded Cisco Live! show. The networking giant made a bold claim that it is actively working to ensure that its customers can benefit from tools that will protect them from exploits 100 per cent of the time when using connected devices and value-added services.

The company previously announced its new Cisco Security Services for Digital Transformation offering, a service the vendor claims will aid organizations in identifying their readiness to adopt digital technologies. Expert advisers recommend security strategies and provide tailored solutions based on industry trends and vital business needs to achieve agility, innovation, and growth, the company said in a statement.