Cisco laying off 5,500 employees, or 7 percent of workforce

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Cisco announced Wednesday it will cut 7 percent of its workforce

Cisco Systems says it will lay off 5,500 employees as the internet gear maker scrambles to adapt to technology changes that have reduced demand for its main products.

The shake-up announced Wednesday means about 7 percent of Cisco's roughly 78,000 workers will lose their jobs beginning this summer.

The purge is the latest example of the upheaval that has rocked some of the world's oldest and biggest technology companies as the relentless march of innovation forces them to head in new directions in search of revenue growth.

In Cisco's case, its business has been hurt as more of its corporate customers rely on remote data centers for their computing needs instead of online networks maintained on their own premises.

"We're committed to making the decisions that are necessary to drive our growth and also to fulfill the commitments and obligations that we made to our customers, partners and shareholders," said Chuck Robbins, CEO of Cisco.

Cisco currently employs about 5,250 people at its RTP campus. The company would not say how many of its RTP employees would be impacted in the layoffs set to take effect in Q1 of FY 2017.

"Cisco provides impacted role numbers as required by local laws and regulations," said Robyn Blum, Cisco Communications. "Beyond that, Cisco does not comment on details of its job actions."

Robbins touted the company's strong performance in Q4 and how it has been rapidly and successfully moving away from hardware, toward software and cloud-based services.

"Today's market requires Cisco and our customers to be decisive, move with greater speed, and drive more innovation than we've seen in our history," he said. "Today we announced a restructuring enabling us 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. We expect to reinvest substantially all of the cost savings from these actions back into the businesses and will continue to aggressively invest and focus on our areas of future growth."

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