Cisco Systems plans to lay off about 7 percent of its global workforce in a restructuring that will see it further focus on hot IT areas such as the internet of things, security, collaboration, next-generation data centers, and the cloud.
The move will cost the company around $700 million in severance payments to the roughly 5,500 staff who will be out of jobs in the coming months. The layoffs will hit some of Cisco's smaller and more mature business areas where long-term growth prospects are low, the company said.
The job losses are lower than those first feared after a CRN report on Tuesday claimed around 14,000 staff would be laid off.
Cisco coupled the announcement with its fourth-quarter earnings report. It said revenue for the quarter fell 2 percent to $12.6 billion while net income rose 21 percent to $2.8 billion. Excluding Cisco's service provider video business, which was sold to Technicolor in July, revenue would have been up 2 percent.
The company's switching, collaboration, wireless, and security divisions all saw higher sales while revenue dropped in the next-gen routing and data center products divisions.