Citing shifts in both market and focus, Cisco Systems Inc. has announced it will reduce its workforce by seven per cent.
The company, known as a manufacturer of routers and switches, recently posted impressive fourth quarter figures. Cisco has been making a conscious change in direction with more attention being steered toward software.
Part of that shift, the company has confirmed will include saying goodbye to 5,500 employees.
“We think this is partly an effort by (CEO) Chuck Robbins to put a stake in the ground and send a message that this is going to be a leaner, meaner Cisco that is focused on driving software and recurring revenue business,” Guggenheim Securities analyst Ryan Hutchinson told Reuters.
Chief Executive Chuck Robbins, in spite of Wednesday’s news, maintained Cisco is operating well.
“We continued to manage our business well,” he was quoted as saying by The Wall Street Journal following a conference call.
Cisco has stated customers are now more interested in purchasing software, rather than hardware.
The funds saved from the job cuts are to be reinvested into areas where growth is expected, the company has stated.