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Cisco Sees Its Revenue Drop Amid Restructuring Charges

November 16, 2016, 9:21 PM UTC
Fortune Brainstorm TECH 2016
Fortune Brainstorm TECH 2016 WEDNESDAY, JULY 13TH, 2016: ASPEN, CO 9:00 AM A NEW MODEL FOR CONNECTIVITY Chuck Robbins, CEO, Cisco Interviewer: Andrew Nusca, Senior Editor, Fortune PHOTOGRAPH BY STUART ISETT/Fortune Brainstorm TECH
Stuart Isett

Cisco Systems reported a 2.6% drop in quarterly revenue, largely hurt by waning demand for its legacy switches business.

The world’s largest networking gear maker said on Wednesday net profit fell to $2.32 billion, or 46 cents per share, in the first quarter ended Oct. 29, from $2.43 billion, or 48 cents per share, a year earlier.

Revenue declined to $12.35 billion from $12.68 billion.

Chief Executive Chuck Robbins, who took over from company veteran John Chambers in July last year, has been steering Cisco towards more software and subscription-based services.

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The company said in August it would lay off about 5,500 employees, beginning in the first quarter, and that savings from the cuts would be reinvested into key growth areas such as security, the Internet of Things, and cloud.

Cisco (CSCO) said on Wednesday it recorded a pretax charge of $411 million related to the restructuring.