Cisco cuts more jobs as part of software ambitions - Mobile World Live

Cisco cuts more jobs as part of software ambitions

18 MAY 2017

Cisco continued to feel the force of efforts to lessen the load on hardware and bolster its software business, as it took the axe to another 1,100 jobs.

The additional job cuts will be on top of the 5,500 cuts it announced in August 2016, and will come from lower growth areas of the business including hardware segments like switching and routing.

Cisco plans to reinvest the sums saved in priority segments such as security, IoT, collaboration, next-generation data centres and cloud.

It confirmed the latest cuts as it revealed revenue dipped 1 per cent year-on-year to $11.9 billion in fiscal Q3 2017, which covers the three months to 29 April.

Net income, on the other hand, rose 7 per cent compared to the same period a year ago to $2.5 billion.

CEO Chuck Robbins said he was “pleased” by the progress of a multi-year business transformation plan.

“The network is becoming even more critical to business success as our customers add billions of new connections to their enterprises,” he commented in the company’s earnings statement.

Cisco said it expects the overall restructuring plan to be completed in the first quarter of fiscal 2018.

Until then, Cisco warned it expects a year-on-year decline in fiscal Q4 revenue of between 4 per cent and 6 per cent.

In an earnings call, the company said part of the guidance was based on weaker sales, particularly coming from the public sector, which it started feeling in fiscal Q3.

Its public sector business includes sales to federal, state and local government. Robbins said there was “a pretty significant stall” in this area, due to budget uncertainties in the US.

Cisco’s Mexico business also took a hit, with orders down 49 per cent year on year, said Robbins. Sales in its biggest business, Switching, rose 2 per cent to $3.49 billion, while revenue from routing dropped 2 per cent to $2.03 billion.

Data centre sales fell 5 per cent to $767 million and Collaboration revenue was 4 per cent down at $1 billion.

Ransomware attack
Following the huge ransomware attack which hit companies around the world last week, Robbins said Cisco’s security business “has never been more relevant”.

“It’s important the tech industry and customers work together to defend against these attacks from cyber criminals. We will continue to do everything we can to help our customers anticipate, prevent and protect themselves from any future attack by harnessing the intelligence of the network and power of our security portfolio,” he added.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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