Cisco CEO Hints at Reorg in Employee Memo

By Jessica Davis  |  Posted 2011-04-07

Cisco Systems (NASDAQ:CSCO) will refocus its attention on five top priorities to right the ship after recent moves and a lack of focus have "disappointed our investors and … have confused our employees."

That's what Chairman and CEO John Chambers told employees in a memo later posted on a public company blog, where you can find the full text.

Cisco's financials have struggled recently while competitors such as HP and Juniper Networks have gained market share and eyed growing opportunity in the market place. Cisco's recent difficulties have left analysts, customers and partners wondering if Cisco had lost its way, distracted by moves into the consumer market and other non-core areas.

"Bottom line, we have lost some of the credibility that is foundational to Cisco’s success – and we must earn it back," Chambers wrote.

Click here to read 10 Ways for Cisco to Get its Mojo Back

The memo comes about a month after Cisco named Gary Moore chief operating officer, a move widely viewed as executed in order to satisfy concerns about the company's performance.

In his memo, Chambers listed Cisco's top priorities as: leadership in core routing, switching and services; collaboration; data center virtualization and cloud; architectures; and video.

"…We now need to prepare ourselves for what’s next, as you will see Cisco make a number of targeted moves in the coming weeks and as we move into FY12," he wrote.  "These actions will be based on uncompromising integrity and will represent a very simple set of guiding principles."

These principles include the following, according to Chambers:

  • Not fixing what is not broken, including areas where Cisco views it is executing well with customers and partners. "The importance of delivery to market through our partners is also clear – and we will do nothing but reinforce this."
  • Addressing with "surgical precision" what the company needs to fix in its portfolio.
  • Accelerating leadership across the five priorities to win in the core. "Our strategy to extend the role of the network will not change. Our approach to leadership in the core amidst this transition will change. In switching we understand that our customers are buying across broader segments and specific needs in this market.   We understand that our competitors in this area are fierce, with different business models and architectures. We will not be defined by them…"
  • Simplifying the process of working with Cisco for employees, customers and partners. "We will significantly rework our systems, tools and funding models to do this…We created the role of COO to expedite this effort and Gary Moore and I will drive these changes with the leadership team."