Cisco is laying off 5,500 employees

Cisco said today that it will cut up to 5,500 jobs as it restructures and — like many big, old IT companies — tries to shift its business toward software and services and away from selling hardware that sits in data centers.

That’s a lot of people — about 7 percent of Cisco’s workforce — but its headcount will still be almost 70,000 after the cuts. (A previous report claimed Cisco would cut more than 14,000 employees.)

Cisco announced the cuts along with its fiscal fourth-quarter results today, reporting that sales grew 2 percent year over year (excluding a video unit) to $12.6 billion during the quarter.

But here’s the challenge: While services may be the company’s future, “product” still generated three-fourths of its revenue last quarter. Its long-running router and switch businesses represented almost half of its sales.

And while Cisco’s security business was its fastest-growing segment — up 16 percent year over year — it still represented just 4 percent of the company’s sales, or $540 million during the quarter.

Here’s Cisco CEO Chuck Robbins’s full interview at this year’s Code Conference, where he explained the company’s strategy to Kara Swisher.

This article originally appeared on Recode.net.

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