Cisco has announced a restructuring plan that will see up to 5,500 jobs go as it revealed its full-year revenues and profits increased.

The US-based vendor said the cull of employees, which represents approximately seven percent of its global workforce, would start in the first quarter of fiscal 2017.

It cited a need to optimise its cost base in lower growth areas and to further invest in “key priority areas” such as security, IoT, collaboration, next generation data centres and cloud.

The move mirrors one made by Ericsson, with whom Cisco signed a business and technology partnership last November.

The two companies hope to generate $1 billion of new revenues by 2018, but last month Ericsson CEO Hans Vestberg stepped down as it attempts to drive through its own restructuring plan.

Cisco announced the cuts as it reported that like-for-like revenues grew three percent in the year to June to $48.7 billion, while net income rose 20 percent to $10.7 billion.

The company also revealed that it had returned $8.7 billion to shareholders during the year – approximately 70 percent of its free cash flow.

Cisco CEO Chuck Robbins said: “We continue to execute well in a challenging macro environment.

“Despite slowing in our service provider business and emerging markets after three consecutive quarters of growth, the balance of the business was healthy with five percent order growth.”

Earlier this month, Cisco was named as the leading SDN and NFV vendor by research firm IHS.

In February, the company acquired Jasper for $1.4 billion in a bid to help telcos accelerate their move into the M2M/IoT space.

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