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Cisco to focus on web services after early 2017 restructure

Cisco Systems will axe thousands of positions across its global workforce in a restructuring plan that could see the company shift focus away from its core business of manufacturing communications equipment.

Announcing a three per cent growth to full year revenues in 2016, Cisco explained in a statement that eliminating up to 5,500 jobs would free up cash to focus on its “lower growth areas”, namely security, the Internet of Things, collaboration, next generation data centre and cloud.

These job cuts, which could mark a seven per cent reduction in Cisco’s global workforce, are set to take place in the first quarter of 2017. It was rumoured before the announcement that the restructuring could axe up to 14,000 jobs.

'More innovation'

Cisco explained its fourth mid-year announcement of job cuts in the past six years in a statement that read: “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.”

The company turned over $12.6 billion (£9.62bn) of revenue in the final quarter of 2016, two per cent more in the final three months of 2015, which completed full year revenues of $48.7 billion for 2016, up three per cent on 2015. Three-quarters of Cisco’s 2016 revenue came from its product range.

Cisco CEO Chuck Robbins said the strong final quarter wrapped up a great year, and that he was pleased with performance in priority areas including security, data center switching, collaboration, and services.

He commented: “We continue to execute well in a challenging macro environment. Despite slowing in our service provider business and emerging markets after three consecutive quarters of growth, the balance of the business was healthy with five per cent order growth.

The Cisco boss said that this growth underlined the strength of the business’ diverse portfolio.

“Our product deferred revenue from software and subscriptions grew 33 per cent showing the continued momentum of our business model transformation,” he added.

Written by for Comms Express

Image: Brian Raisbeck/iStockADNFCR-1186-ID-801823956-ADNFCR

Cisco to focus on web services after early 2017 restructure - Article Discussion

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