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Cisco reorgs trimming SVP ranks

Annual pattern of revamps and staff reductions see senior leaders exit on their own, or with help

What’s prompting many senior vice president-level executives to leave Cisco is the company’s previously announced layoff of 6,000 employees, and a restructuring in the product development and engineering organization affecting 25,000 employees. Business Insider first wrote about the magnitude of the engineering restructuring earlier this week.

At last count, Cisco has seen five SVPs leave, or plan to leave, voluntarily or involuntarily over the past few weeks: Sujai Hajela (who leaves next week), SVP of Enterprise Infrastructure and Solutions; Sri Hosakote, SVP and General Manager, Swicthing and Wireless; Surya Panditi, SVP and GM, Service Provider Networking Group; David Yen, SVP and GM, Data Center Group; and Chris Young, SVP of Cisco’s Security Group.

In addition, there have been a handful, that we know of, lower level VPs that have left voluntarily and involuntarily as well.

Our sources say the executives that departed voluntarily have become impatient with the roughly annual reorganizations, restructurings and downsizings that have shifted priorities, diluted roles, detached engineering from product management and product/technical marketing, and generally created an atmosphere of uncertainty and doubt about Cisco's investments and growth initiatives. Indeed, RBC Capital Markets analyst Mark Sue states in a bulletin issued earlier this week urging Cisco, like HP, to split in two that Cisco’s layoffs and restructurings have become routine and regular over the past four years, and are reactive to changing market dynamics instead of proactive.

This pattern has fostered disillusionment among many executives with Cisco's annual shifts and the current direction for growth, our sources say. The current engineering realignment, they say, is creating a structure where SVPs who are are responsible for taking architected solutions to market – Rob Soderbery in enterprise, and Kelly Ahuja in service provider – have no oversight over the engineering resources for that solution because it’s being divorced from product management and marketing. Instead of a handful of product managers, engineers and marketers working directly with those SVPs on a customer hardware/software solution, engineers are now split off into separate business units, making product development coordination more cumbersome and perhaps elongating development cycles.

In data center, for example, there are different business units responsible for Nexus 2000-7000 series switches, another for Nexus 9000, another for the Unified Computing System, and a fourth for Intercloud Fabric and the Nexus 1000V, sources say.

This would seem to counteract Cisco’s objective with the product development and engineering reorganization, which is to “drive more … speed, agility and efficiencies” in Cisco’s business, according to a statement from the company:

We will continue to make the business decisions and bold moves we need to make to secure our leadership position in the market going forward. Successful transformation is dependent on a company’s ability to anticipate market transitions and have the courage to disrupt itself and its industry. This requires thinking differently, moving with greater speed, and investing in innovation that will solve customer problems and future-proof the business. It’s in Cisco’s DNA to continuously disrupt ourselves, strengthening our position and improving how we deliver solutions.

To continue to lead, we need to move faster than the market. Our speed and agility to change will be one of our key competitive advantages. Three years ago, we started our transformation and our solid results in Q4 and for FY14 reflect the good progress we have made to date. But we are not done. We are continuing to make the moves to drive more innovation, speed, agility and efficiencies in our business and move from selling boxes to selling solutions, architectures, solutions and outcomes.

Earlier this summer, we brought our sales and engineering closer together. For example, the work we are doing in engineering to implement a DevOps and an Agile development model, the work we are doing to integrate our products and services sales teams into one solutions salesforce, and the work we are doing in services extending into new market opportunities. These are big moves that we expect big impact over time for us. It's a different way of doing things that will allow us to be faster and even more responsive to our customers and the market.

Of the 25,000 employees in the development organization, many have new reporting lines as part of Cisco’s effort to align business to priority areas, the company said in a statement to ZDNet.

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