Cisco is set to axe 1,100 jobs in a restructuring effort following a sixth quarterly dip in revenue that saw stocks fall.
The company’s third quarter results showed that revenue was $11.9 billion, a 1% year-on-year decrease. Cisco also issued a warning that the fourth quarter would be even worse, prompting company stocks to fall 8.2% to $31.05.
The news regarding the company’s plan to restructure comes after the company pledged to cut 5,500 jobs in August of 2016. The restructuring process is estimated to end in the first quarter of 2018.
Chuck Robbins, CEO, Cisco, said: “I am pleased with the progress we are making on the multi-year transformation of our business.”
“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.”
Cisco reported a net income of $2.5 billion and a lower than expected 50 cents earning per share.
Though the company has stated that job cuts would create up to $150 million in pretax charges, the money saved will be reinvested into key priority areas including the IoT, security, and cloud.
Cisco’s key markets actually went up but the majority saw downturns. Switching rose 2%, wireless was up 13%, and security saw an increase of 9%. However these upticks failed to account for routing down 2%, collaboration down 4%, and data centres down 5%.
Kelly Kramer, CFO, Cisco, said: “We executed well in Q3, delivering $11.9 billion in total revenue, while driving solid profitability and cash generation as we deliver on our strategic priorities.”
“We will continue to invest in growth areas as we move the business toward more software and recurring revenue and return value to shareholders.”
The company is expecting fourth quarter revenue to dip between 4% and 6%, between $11.88 billion-$12.13 billion.