Cisco has revealed plans to cut a further 1100 jobs from its global footprint, which has already seen thousands of jobs impacted by an ongoing transformation program.
“In August 2016, we announced a restructuring plan in order to reinvest in our key priority areas in which up to 5,500 employees would be impacted, with estimated pretax charges of approximately US$700 million,” the global networking vendor, which released its latest quarterly results on 17 May, told shareholders.
“In May 2017, we extended the restructuring plan to include an additional 1100 employees with $150 million of estimated additional pretax charges,” it said.
It remains to be seen whether the new round of cuts will affect the company’s footprint in Australia and New Zealand.
“Cisco constantly reviews our business and our investments and we will always make the changes necessary to effectively manage our business and drive our long-term profitable growth," a representative for the company told ARN.
Cisco said that, during the first nine months of its 2017 fiscal year, it had recognised pretax charges of US$614 million to its financial results in relation to the restructuring plan.
Further, Cisco expects to recognise about US$150 million to US$200 million of pretax charges under its plan in the fourth quarter of fiscal 2017, and it predicts that the plan will be “substantially” completed by the end of the first quarter of fiscal year 2018.
"I am pleased with the progress we are making on the multi-year transformation of our business," Cisco CEO, Chuck Robbins, told investors. "The network is becoming even more critical to business success as our customers add billions of new connections to their enterprises.
“We are laser focused on delivering unparalleled value through highly secure, software-defined, automated and intelligent infrastructure," he said.
The proposed cuts come as Cisco reports third quarter revenue of US$11.9 billion and net income, on a generally accepted accounting principles (GAAP) basis, of US$2.5 billion.
Total revenue was US$11.9 billion, down one per cent, with product revenue flat and service revenue down by two per cent. Meanwhile, 31 per cent of total revenue was from recurring offers, up from 29 per cent for the third quarter of fiscal 2016.
The company saw revenue in its Asia-Pacific Japan and China (APJC) segment drop by two per cent year-on-year during the period, to US$1.9 billion. At the same time, revenue in its Americas and Europe, Middle East and Africa (EMEA) segment remained flat.
According to the latest results, the company’s NGN routing, collaboration, data centre and service provider video revenue decreased by two per cent, four per cent, five per cent and 30 per cent, respectively.
The latest results come after a string of high profile acquisitions for the company, which completed its acquisition of AppDynamics in the third quarter of fiscal year 2017.
In May, Cisco announced its intent to acquire Viptela, a software-defined wide area network company. The acquisition is expected to close in the second half of calendar 2017.
Also in May, the company said it would acquire the Advanced Analytics team and associated advanced analytics intellectual property developed by Saggezza, a privately held technology services company. The acquisition expected to close in the fourth quarter of fiscal 2017.
Meanwhile, on 11 May, Cisco announced its intent to acquire MindMeld, a privately held artificial intelligence (AI) company. The acquisition is expected to close in the fourth quarter of fiscal 2017.
Updated on 18 May to include comment from Cisco.
