Cisco Reorganizes Its Business
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Cisco (NASDAQ:CSCO) is changing the way it is organized, in an effort to streamline its operating model.
The networking giant today announced what it called "significant changes" to its business structure, which includes changes to its sales, services and engineering operations. Cisco's operational changes follow the company's exit from the Flip camera business last month and a re-organization of its consumer facing activities.
Cisco's Worldwide Field Operations are being reorganized into three regions: Americas, EMEA (Europe, Middle East and Africa) and Asia Pacific. The Services teams will realign with the new geographic divisions of the operations teams. Cisco's plan is for the new sales teams to be up and running by July 31st of this year.
From an engineering perspective, Cisco will now have two key leaders. Padmasree Warrior who serves as Cisco CTO will be joined by senior vice president Pankaj Patel in co-leading Cisco's overall engineering efforts. Both Patel and Warrior will report to Cisco's Chief Operating Office, Gary Moore.
Cisco's is also reorganizing its business council structure which help the product teams to set out roadmaps and priorities. There will now be councils for enterprise, service providing and emerging countries. The goal is to more closely link strategy with execution. Additionally, Cisco is now placing the onus of responsibility on the sales and engineering teams for profitability targets.
"Today, the market is driving toward simplification and it's why the network matters," said Cisco Chairman and CEO John Chambers in a statement. "It's time to simplify the way we execute our strategy, and today's announcement is a key step forward."
2011 has been a challenging year for Cisco so far.
In addition to shutting down its Flip camera unit, which Cisco had acquired for $590 million, Cisco also gave up on its hosted email offering.
During Cisco's second quarter fiscal 2011 earnings call, the company reported a decline in its switching business of seven percent on a year-over-year basis. At the time, Cisco blamed the transition from its older switches to a new generation of gear as the cause for the decline.