Cisco saber 5,500 jobs to better focus on services – Express

Wednesday announced restructuring plan will allow “ to optimize our cost base in low-growth areas of our portfolio ” activities, the company said in a statement.

He said in particular want to reinvest the savings “ in priority areas such as security, connected objects, the next generation of data centers or the cloud .”

The cuts will begin this quarter began in early August, the first of the year shifted from Cisco.

On his last year ended in late July, the group posted a net profit of $ 10.7 billion, up 20% year on year, according to results published alongside Wednesday.

In the last quarter alone, the increase was 21% to 2.8 billion. Quarterly earnings per share, which is the benchmark on Wall Street, has also exceeded analyst expectations for 63 cents.

The turnover has however stagnated at 49.2 billion throughout the year and declined 2% to 12.6 billion in the fourth quarter.

Cisco has seen particular slowing orders from service providers (-5%) and emerging markets (-6%). At the level of the whole group, they are still up 1% in the fourth quarter

– Betting on cloud –

Faced with a slowdown in its activities as traditional routers to telecom networks, whose revenues still declined 6% in the fourth quarter, Cisco has been trying for several years to reorient on the fastest growing sectors.

It appears thus among other revenues up 16% this quarter in its branch of the security services, and 5% in services.

The group also seeks to increase the share of its recurring revenue from subscription for services or software, compared to sales of equipment. They now represent 28% of total sales, against 25% a year ago.

To help his transition, Cisco has relied heavily on acquisitions like that, earlier this year, the company specializes in services for connected objects Jasper for $ 1.4 billion.

However, Cisco had also announced several waves of job cuts between 2011 and 2014, totaling 17,800 positions.

The new cuts were expected, but proved less than expected: the website specialized in information on the CRN technology sector had indeed raised up to 14,000 jobs.

Cisco is not the only historical actor of the US IT sector subject to painful adaptation to market changes.

The specialist for Intel computer chips, which seeks to adapt to the crisis by shifting the PC also to the connected objects and data centers, inter alia, decided to remove 12,000 positions in April.

Also shaken in the PC market, the software giant Microsoft had also drawn conclusions from mistakes in smartphones with a historical social summer 2014, which affected 18,000 positions, including 12,500 Nokia. And announced a total of 12,500 additional cuts in the next two years.

Microsoft has however managed to establish itself as the second largest global player in cloud services behind Amazon, far behind other players like IBM or the Internet giant Google, which strives for more recently from strength to strength in services for businesses.

In the current quarter, Cisco said it expected a shift in sales between a further decline of 1% and a growth of 1% for earnings per share of 58 to 60 cents. Analysts were aimed until the top of that range.

In electronic trading after the closing of the New York Stock Exchange, the action Cisco lost about 1% to 9:50 p.m. GMT.