Chambers to retire this fall?

cicso ceo john chambers

Report cites people familiar with chatter inside Cisco, says massive layoff will accompany departure

Cisco CEO John Chambers may retire this fall amidst a massive reorganization that could lop tens of thousands of employees off its workforce. So says Scott Raynovich, author of the tech/business sheet The Rayno Report.

Raynovich cites several sources “familiar with the chatter inside the company” for his prediction. The timing would be consistent with what Chambers said back in 2012: that he planned to retire in two to four years, and a successor would be one of 10 Cisco executives.

And Chambers will soon turn 65, after all, having been at the helm 20 years. His 65th birthday is in August, the month Cisco reports its Q4 and full year fiscal 2014 results.

Perhaps coincidentally – or not -- nine different Cisco executives and directors sold stock in the past month, six of whom have decreased their holdings by more than 10%. John Chambers decreased his holdings by almost 31%.

No Cisco insiders purchased any Cisco stock within that month, just after Cisco announced third quarter results that saw revenue dip 5.5% and net income slump 12%. Indeed, none have purchased any since January 2013.

Cisco is being pressured by software-defined networking, which seeks to gut much of the routing and switching intelligence from networking hardware and centralize it in software driven servers; and to look for growth opportunities beyond routing and switching, such as in cloud computing and the Internet of Things -- a market ostensibly of literally anything IP-enabled -- that Cisco claims holds tens of trillions in value.

Raynovich says SDNs will create $20 billion in additional value beyond the $3 billion or so already created, through venture capital, mergers and acquisitions, and IPOs.

Cisco expects Q4 to be 1% to 3% down from the fourth quarter of last year. If Chamber’s retirement is imminent, Cisco will disclose a succession plan six months in advance, according to Raynovich’s report.

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