Rumors of Cisco laying off 14,000 employees turned out to be greatly exaggerated. In its fourth quarter and fiscal year results for the period ended July 30, 2016, Cisco said it will be laying off 5,500 employees – a 7 percent reduction in its workforce. The layoffs have now begun in the first quarter of fiscal 2017.
Cisco’s CEO Chuck Robbins said the restructuring will enable the company “to optimize 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 center, and cloud.”
The company plans to reinvest nearly all of the cost savings from the layoffs back into these higher-growth businesses.
Cisco reported fourth quarter revenue of $12.6 billion up 2 percent year over year. It reported non-GAAP net income for the quarter of $3.2 billion, up 7 percent from the same quarter in 2015. And it reported earnings per share of $0.63 up 9 percent year over year.
For fiscal 2016, Cisco reported revenue of $48.7 billion up 3 percent year over year and non-GAAP net income of 12 billion, up 7 percent year over year.
During the fourth quarter, it added three new technologies to embed security into its branch office routing products. Also during the quarter, it announced its acquisition of the security company CloudLock for $293 million.
Finally, there were a couple other notable tidbits from the 45-minute earnings call today.
Robbins said that among Cisco’s top 10 webscale customers, business was up 2 percent during the fourth quarter.
And he highlighted Cisco’s SD-WAN product. “We’re well positioned with our IWAN portfolio,” he said, adding that Cisco’s technology was differentiated from others’ because of its security at the branch.