With software defined networking (SDN) taking a large slice of the traditional network business, Cisco’s almost unassailable position is, well, assailable, and the result is a 7% cut to its 73,700 workforce and charges of up to US$700 million in this quarter to restructuring.
“We need to make some pretty immediate shifts in our portfolio,” Cisco chief executive Chuck Robbins said in an interview with Bloomberg. “We have rapidly shifting customer expectations. The winners in the future will be the ones that understand those dynamics.”
Cisco’s latest earning report looks OK. It grew 3% in revenue to US$48 .7 billion over the year. But its forward projections are for negative growth.
It contained a paragraph on restructuring. "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 optimise 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 centre, and cloud. We expect to reinvest substantially all of the cost savings from these actions back into these businesses and will continue to invest aggressively to focus on our areas of future growth.
"The restructuring will eliminate up to 5500 positions, representing approximately 7%t of our global workforce, and we will take action under this plan beginning in the first quarter of fiscal 2017."