The veteran chief executive of Cisco Systems Inc., John Chambers, has said in a companywide email to his employees that the California-based company has lost its focus and is lacking in discipline and it is high time that steps should be taken to overhaul its operations.
"We have disappointed our investors and we have confused our employees," said Chambers, who is the head of Cisco's chief since 1995. Though Chambers defended his strategy, he noted that Cisco would "make a number of targeted moves" and "address with surgical precision what we need to fix in our portfolio."
The Cisco CEO said in the letter that the profitability of the company has come down and the once high-flying Cisco is now finding it tough to meet sales growth goals while pushing into 30 new businesses. Chambers expressed concern that the lack of focus has also allowed rivals such as Hewlett-Packard Co. (HPQ) and Juniper Networks Inc. (JNPR) to make gains in Cisco’s home turf.. “The acknowledgment that Cisco is having a few setbacks suggests that change is probably a good thing,” said Brent Bracelin, an analyst at Pacific Crest Securities in Portland to Bloomberg. He further added, “It internally signals the head of the company is very focused on addressing some of the issues that have resulted in where the stock is at today.”
Cisco posted an 18% drop in quarterly profit in February. Chambers promoted Gary Moore to the new position of chief operating officer in February to help the company improve its business.
