Networking hardware giant Cisco Systems announced that it’s laying off 5,500 employees in the first quarter of 2017. The move will see the company lose about 7 percent of its global workforce.
Cisco isn’t in financial trouble: Its fourth quarter and fiscal year 2016 earnings report showed that it increased revenues by 2 percent year-on-year to $12.6 billion. However, it’s keen to prioritize its efforts in domains like security, IoT, collaboration, data centers and cloud services.
Reuters noted that CEO Chuck Robbins, who completed a year at the company just last month, has been focusing Cisco’s energy towards more software and subscription-based services. The strategy paid off: Security products and services saw a revenue gain of 16 percent in the last quarter of 2015.
Cisco’s plan to slash jobs is the latest major blow to the already-hurting tech industry in the past year. Most recently, Seagate announced plans to downsize by letting 6,500 employees go; Intel announced that it would lay off 12,000 of its staff in April.
Things aren’t likely to look up. According to outplacement consultancy Challenger, Gray & Christmas, Inc., companies in the US have cut 63,000 jobs this year. Global Equities Research analyst Trip Chowdhry estimates that we’ll see that figure rise to 370,000 by the end of 2016.