The news that Cisco Systems Inc. will trim more than 5,500 jobs from its workforce is a sign it is in a restructuring phase, according to the networking giant.

Cisco this week released its fiscal results for the latest quarter, with its revenue growing by only two per cent compared to the same time last year. In a statement on Wednesday, the cuts — which represent about seven per cent of the global workforce — will enable the firm 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 said in a statement.

The San Jose-based network equipment manufacturer has been working to expand beyond its legacy networking business and focus more on security and cloud products; revenue in the company’s switching and routing business units have been weakening as more enterprises look towards the cloud and managed services for their computing and networking requirements.

At its Cisco Live event this past July, CEO Chuck Robbins said the company is looking at acquisitions — including its recent purchase of cloud and the Internet of Things (IoT) solution provider Jasper Technologies — and a move towards subscription-based models for growth.

Customers are embracing mobility, cloud, analytics, and IoT as they look to digitize business operations — and the IT network needs to be “digital ready” to meet these needs, Robbins said at the time.

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