Cisco Trims Senior Management Team

Cisco Systems has revealed it is streamlining its upper management team, as the networking giant continues its painful restructuring.

The management changes will give CTO Padmasree Warrior more duties, and will see the departure of Ned Hooper, the chief strategy officer who oversaw some of the key acquisitions for the networking giant over the past few years.

In addition, Pankaj Patel, senior vice president of engineering, will assume control over Cisco’s engineering group, a job that he and Warrior had shared.

Company Restructuring

The changes are part of the company’s ongoing restructuring that began in 2011, according to a 26 June blog post by CEO John Chamber and COO Gary Moore.

“Over the past year, we have refocused our engineering organisation for agility, better decision making, and a renewed focus on innovation,” Chambers and Moore wrote. “The market share numbers speak for themselves and our customer confidence has never been stronger. We have a strong leadership team and the business group leaders have demonstrated strong execution. Now the time is right for us to drive the next phase of our organisational evolution.”

The 45-year-old Hooper had been with Cisco for 13 years, reaching the senior vice president level and becoming the company’s chief strategist. He led the efforts in several significant acquisitions, including the $2.9 billion (£1.8bn) acquisition of WebEx in 2007, $3.3 billion (£2.1bn) purchase of telepresence rival Tandberg in 2010, and the current bid to buy NDS Group for $5 billion (£3.2bn).

Hooper also ran Cisco’s $2 billion (£1.3bn) investment unit, which included the company’s “spin-in” strategy of funding new startups run by Cisco engineers and, if the technology worked well, buying the new company. Cisco most recently is using that strategy with a new company called Insieme, which is being started by three Cisco engineers and will develop products for software-defined networking environments.

Hooper is leaving to form a new investment company, something he and Cisco officials have been working on for several months, according to Chambers.

“We look forward to partnering with him in his new endeavour,” the CEO wrote.

Warrior, 51, will now be Cisco’s chief technology and strategy officer, and the strategy and business development teams that had reported to Hooper will now report to Warrior.

Streamlining Move

“Over the past four years, Padma has established a tremendous track record of results, such as building Cisco’s strategy and execution around architectures, cloud, overall technology strategy framework, and attracting and developing industry leading technical talent,” Chambers wrote. “We look forward to accelerating our market position under Padma’s strategic direction.”

Patel has been key in building up Cisco’s service provider business, which includes selling networking and mobility products to Internet providers and telecommunications firms.

In a research note, Brian Marshall, an analyst with ISI Group, said the latest moves were Cisco’s continuing efforts to “streamline the organisation and consolidating responsibility for engineering, technology vision and strategy with two executives rather than three previously. While we favour stability in the leadership ranks, we do not believe these changes were motivated by new execution, competitive challenges or strategic shifts.”

Chambers began restructuring the company last year after several disappointing financial quarters fueled in part by rapid expansion into new areas, including consumer, over the previous couple of years and by growing competition from the likes of Hewlett-Packard, Juniper Networks and Huawei Technologies.

The restructuring included shuttering businesses – including the profitable Flip video camera – and cutting as many as 6,500 jobs.

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