Cisco Systems forecast better-than-expected first-quarter revenue on Wednesday and said it was cutting 7% of its global workforce, sending its shares up 5% in extended trading.

The San Jose, California-based company estimates it will recognize pre-tax charges of up to $1 billion in connection with the plan, with $700 million to $800 million of these charges being recognized in the first quarter.

Cisco had said in February it would cut 5% of its global workforce, or more than 4,000 jobs, while lowering its annual revenue target.

The company expects first-quarter revenue in the range of $13.65 billion and $13.85 billion, while analysts on average expect $13.71 billion, according to LSEG data.