Cisco Systems said Wednesday that 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 means about 7 percent of Cisco’s roughly 74,000 workers will lose their jobs beginning this summer.

One of Cisco’s largest operations is located in Research Triangle Park, where about 5,000 full-time and contract employees work. There was no immediate word on how many people there would lose their jobs.

“This is a growing area, so if people get laid off, maybe they won’t find a job exactly with their skill set. But if you’re going to be laid off, this is the area to be laid off in,” North Carolina State University economist Mike Walden said. “We can absorb that, and hopefully, though, people will be able to re-skill and find jobs and stay in this area.”


  • More coverage: What Cisco’s layoffs mean about the tech giant’s transformation. (WTW Insider)

The purge at Cisco 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 or cloud computing for their computing needs instead of online networks maintained on their own premises.

“We need to be aware that the technology sector, which is so important and so important in the Triangle, is going to be constantly evolving, and occupations that were in play one year may be out of play another year,” Walden said, noting Cisco appears to be transitioning to software and analytics.

Technology changes have forced Microsoft to begin cutting 4 percent of its workforce, and Hewlett Packard is cutting about 3,000 positions.

As the pace of innovation picks up, Walden said, it could mean changes in the composition of the tech sector.

“In many cases, being small is good in the technology area because it’s easier for you to perhaps innovate. You don’t have some fixed costs in areas that perhaps aren’t viable,” he said. “I still think the tech sector is a very, very good sector for growth in the future, but who does that growing may be a lot different.

Cisco (Nasdaq: CSCO) has cut jobs in each of the last three years. (Note: The story resumes after the stock chart from Graphiq.)

Chief Executive Chuck Robbins, a graduate of the University of North Carolina at Chapel Hill, has already reorganized the company’s upper management and engineering organization since taking over a year ago.

Network World, an industry news website, said the layoffs shouldn’t be a surprise, given Robbins’ aggressive acquisition strategy.

“[O]thers have speculated Cisco would make a sizable cut in its workforce this year giving its growing stable of acquisitions and its shifting software emphasis. Cisco has acquired 15 companies under CEO Chuck Robbins’ tenure, which is now early into its second year,” Network World noted.

Computer Reseller News, another technology news website, reported that Cisco has already offered early retirement packages to “many” employees.

CRN reported Tuesday that layoffs could reach as high as about 14,000 people, or 20 percent of Cisco’s workforce.