U.S. internet gear maker, Cisco Systems, said on Wednesday it would eliminate up to 5,500 job positions, about 7 percent of its global workforce under its restructuring plan.

The technology company based in San Jose, northern California, said it would optimize cost base in lower growth areas of its portfolio and further invest in key priority areas such as security, the internet of things, collaboration, next generation data center and cloud.

"We expect to reinvest substantially all of the cost savings from these actions back into these businesses and will continue to aggressively invest to focus on our areas of future growth," Cisco said in a news release announcing earnings of its fourth-quarter and entire fiscal year 2016, which ends on July 30, 2016.

Saying it achieved year-on-year growth of 2 percent, Cisco reported the fourth quarter revenue of 12.6 billion U.S. dollars, net income on a generally accepted accounting principles (GAAP) basis of 2.8 billion dollars, or 0.56 dollar per share, and non-GAAP net income of 3.2 billion dollars, or 0.63 dollar per share.

With 48.7 billion dollar revenue, its fiscal year 2016 growth stood at 3 percent.

Among the "highlights" of the fiscal year performance was what Cisco categorized as "deferred revenue," which was up 8 percent in total to amount to 16.5 billion dollars.

It was driven largely by subscription-based and software offerings as the company claimed to have "continued to build a greater mix of recurring revenue."

"We continue to execute well in a challenging macro environment," said Cisco Chief Executive Office Chuck Robbins about the fourth quarter. "Our product deferred revenue from software and subscriptions grew 33 percent showing the continued momentum of our business model transformation."

As the largest network equipment manufacturer in the world, the company has been moving away from its traditional role as a supplier of hardware products.

About the layoffs, Cisco said it "will take action under this plan beginning in the first quarter of fiscal 2017."