Networking kingpin Cisco is sending out about 1,200 pink slips in what its referring to as a simplification of the company. The full statement from Karen Tillman, vice president of corporate communication, explains the almost two percent of Cisco’s global workforce saying,

“These actions, subject to local legal requirements, including consultation where required, are part of a continuous process of simplifying the company, as well as assessing the economic environment in certain parts of the world.”

China is a particularly sensitive regions for Cisco right now. Huawei is gobbling up bigger and bigger chunks of the markets, while other firms such as Arista Networks are also working on growing their share of the pie.

In addition to the troubles in China, Gartner analyst Mark Fabbi pointed to another reason that is likely driving this latest wave of dismissals. The customer mindset is changing from the long term contracts Cisco has historically favored. Innovations such as software-defined networking are making long term contracts less of a necessity.

The network is getting smarter, and Cisco is recognizing the need to freshen up its portfolio. Less than a week ago it acquired Virtuata, a stealth startup that hasn’t really disclosed all that much about its work. It’s developing security software for virtual environments that will somehow be integrated with Cisco’s line-up, although it’s not clear how. Terms of the deal were not disclosed.

While Cisco is trying to stay ahead of the market (or rather catch up with it), competitor Juniper has its own problems to worry about. The vendor will hold its earnings call after market closing today and its Q2 results are expected to be far from positive, but analysts believe that the company will manage to recover on the longer run.