Cisco to slash 5,500 jobs in cost-cutting move

SAN JOSE, Calif. - Cisco Systems (CSCO) said it will lay off 5,500 employees as the internet gear maker scrambles to adapt to technology changes that have reduced demand for its main products. 

The shake-up, announced Wednesday, means about 7 percent of Cisco’s roughly 78,000 workers will lose their jobs beginning this summer. The networking giant said the cuts would reduce its costs while allowing the company to invest in faster growing tech segments, such as cloud computing and security. 

The purge is the latest example of the upheaval that has rocked some of the world’s oldest and biggest technology companies as the relentless march of innovation forces them to head in new directions in search of revenue growth.

In Cisco’s case, its business has been hurt as more of its corporate customers rely on remote data centers for their computing needs instead of online networks maintained on their own premises. 

Cisco also reported quarterly net income of $2.8 billion, or 56 cents a share, on revenue of $12.6 billion.

“We had another strong quarter, wrapping up a great year,” Cisco CEO Chuck Robbins said in a statement. “I am particularly pleased with our performance in priority areas including security, data center switching, collaboration, services as well as our overall performance, with revenues up 2 percent in Q4 excluding the SP Video CPE business.”

Cisco shares, which have risen 13 percent this year, fell 40 cents, or 1.3 percent, to $30.72 in after-hours trading.