Cisco Systems Inc. (Nasdaq: CSCO) has confirmed layoff plans -- but the job cuts aren't as big as CRN's trusted sources had indicated. The networking giant plans to cut 5,500 positions in its fiscal 2017 year (which started July 31, 2016). That's a significant layoff figure, but far lower than the 14,000 estimate that CRN predicted yesterday.
The planned cuts are the latest in a lengthy list of technology industry layoffs announced so far in 2016.
Overall, Cisco's business performed better than Wall Street expected for the company's Q4 2016, which ended on July 30, 2016. Fourth quarter revenue was $12.6 billion, and net income was $2.8 billion -- reasonably healthy figures for a hardware-centric company that's racing to embrace SaaS, recurring revenue and IoT opportunities.
CEO Chuck Robbins called it a strong quarter that "wrapped up a great year" -- though he conceded Cisco's service provider business experienced softness.
Layoff rumors have been swirling around Cisco for the past 24 hours or so, following a CRN report that the company planned to cut 14,000 positions. In reality, the figure is 5,500 positions, the networking company confirmed in an earnings report.
In a prepared statement about the cuts, Cisco said:
"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."
Cisco's stock is down about 1.37 percent in after-hours trading. ChannelE2E may update this article later tonight after we've had a chance to digest the company's earnings call.