Scott Herren: And James, to be clear, don’t think of this as a headcount action that is motivated by cost savings. This really is a rebalancing. As we look across the board, there are areas that that we would like to invest in more, Chuck just talked about them. Security, our move to platforms and more cloud-delivered products. But we’re also going to maintain our financial discipline as we do that. And so this is about just rebalancing across the board. In a perfect world, you’d have 100% skill match, and you can take the people in the areas or the skills in certain areas and just move them to where we need to invest and unfortunately, that’s not — it’s not a perfect world. But we do have a — if you look at the number of jobs that we have opened in the areas that we’re trying to invest, it is just slightly lower than the number of people that we believe will be impacted.
We’re going to be working really hard to help match our employees to those roles to the extent there’s a skill match. So, we’re going to work really hard at that.
James Fish: If I could just follow up quickly on that. I appreciate the color there, guys, and understand the sensitivity you guys want to have. In terms of that $600 million hit though, Scott, should we expect that to actually be the net savings as a result, or is that going to — the net saving is actually going to be lower because you’re kind of repositioning some folks?
Scott Herren: Yes. It’s really not motivated by cost savings. So the net — by the time we get to the end of the year, our expectation is we have about the same headcount that we had at the beginning of the year. But there’s two pieces to this. One is what we’ve been speaking about just now about the headcount impact. There’s a second piece of this, that’s really about rightsizing our real estate portfolio. And we’ve got a long tail of small offices distributed around the world that are significantly underutilized, and in fact, unused in some cases. So the second piece of that charge, there will be two elements to it. One that’s people related, the second piece will be about rightsizing our real estate portfolio. That will generate some savings, not much in fiscal 2023, but longer-term, that will generate some savings.
James Fish: Helpful. Thanks guys.
Marilyn Mora: Next question, please.
Operator: Samik Chatterjee with JPMorgan. You may go ahead, sir.
Samik Chatterjee: Yes. Okay. Hi. Thanks for taking my questions and congrats on the strong print. I guess I just had one. I think if I can go back to the — Chuck, your comments about seeing hesitation from EMEA customers, a bit more given the macro backdrop there? And you spoke about the opportunities that you see at the same time. Maybe if you can ask you when you at seeing the hesitation from the customers there? How are you seeing them prioritize across your portfolio? Like when it comes to data center versus campus versus security as they’re reevaluating their spend, or hesitating investments, like how are they prioritizing within your portfolio? And we see areas are getting impacted by that? Thank you.
Chuck Robbins: Yes, Samik, it’s a good question. And I would say — the first thing, I would say is that Gartner recently came out with a survey of executives in our customer base, and they’ve — almost half of them said that their technology investments will be the last thing they cut. So that’s just a backdrop for, I think, how important customers view their technology investments these days. When we look at where customers are investing, many of them are investing to they’re moving forward with their hybrid work investments, right, and creating the infrastructure that they need to deal with this new world. We see customers continuing. We saw a recent survey that talked about customers who are balancing their private cloud and public cloud workloads.
And so the whole re-architecture of the infrastructure to deal with these new traffic patterns is another area. I mentioned in Europe with the power, with the energy costs. There’s a lot of focus. IoT has just been accelerating over the last two to three years, and we saw another — I think we had a record bookings quarter in Q1. I believe, it was really strong, where customers are really looking to connect these systems to actually optimize their power consumption and their efficiency. And again, we see a lot of customers who are moving, who are doing greenfield real estate projects that are really focused on reducing — going to low voltage architectures, which leads them to power over Ethernet, which leads them to rebuilding their infrastructure.
And then you’ve got cybersecurity and you’ve got full stack observability. We continue to see 5G build-outs there. There’s just lots of — there’s a lot of positive tailwinds, notwithstanding the short-term dynamic environment that we’re in.
Samik Chatterjee: Okay. Thank you.
Marilyn Mora: Thank you. I think we have time for one more question.
