Cisco's new CEO issues another warning about his plans to change the company

Cisco CEO Chuck RobbinsCiscoCisco CEO Chuck Robbins

With the resignation of two top executives, Cisco’s new CEO Chuck Robbins said that more changes at the top are in store.

The company tells us that within the next two weeks he will announce his full new leadership team and he hinted there will not be as many leaders as there once were:

In a blog post, Robbins wrote (emphasis ours):

As I transition to the role of CEO, my focus areas are acceleration, simplification, operational rigour and culture.

Going forward, we will move to a flatter leadership team designed for the speed, innovation and execution that is required of us over the next decade.

The bigger question on employees’ minds: Are the company’s annual layoffs and restructuring over?

We don’t know. But by looking at the language, we won’t be surprised if Cisco announces either another layoff, or if its new CEO talks about another re-org.

That’s because Robbins’ reference to a “flatter leadership team” is the second such warning about org changes he’s given since he was promoted to CEO last month.

Last month, when Cisco announced his promotion, Robbins told outgoing CEO John Chambers that his administration is “going to make sure we drive a level of operational rigour that maybe is even a little tougher than what you did, John.”

On a later conference call he talked about “doubling down” on “operational rigour.”

Cisco employeesCiscoCisco employees

We may have to until August find out exactly what he means by this.

That’s when Cisco has traditionally announced any large-scale layoffs, along with its annual financial results. (Cisco’s fiscal year ends in July.)

For the previous four years in a row, starting in 2011, Cisco announced layoffs.

All told, Cisco eliminated about 18,000 jobs between 2011 and 2014. But with acquisitions and hiring, Cisco ended its fiscal 2014 workforce with only 1,000 fewer employees than it had in fiscal 2013, the company said. It employs about 70,000 people worldwide.

Chambers told us in an interview last summer that he doesn’t have “the heart” to trim the workforce like he should.

“A well-run organisation turns over 10% of their organisations, including senior leadership. I don’t have the heart to do that. But we need to run at 3% to 5% in voluntary attrition. We need to do that a little better — we run at 3%,” he said.

Cisco also warned that its fiscal 2015 would see more restructuring: In its 2014 annual report, the company flat-out warned: “In fiscal 2014, that transformation continued but has not finished yet.”

In its 2014 annual report, the company flat-out warned: “In fiscal 2014, that transformation continued but has not finished yet.”

And we know that last fall, the 25,000-person engineering team went through a major re-org affecting about 35% of its workforce.

The sales teams and service teams have also gone through major changes to eliminate the many fiefdoms and silos that accumulated during years of growth through acquisitions.

Cisco wants teams to work faster and better together. And it may still have too many products. Chambers mentioned last month, a couple times, that Cisco has 18 different product categories.

So, again, the question is, was the huge engineering re-org the last of it? Or will fiscal 2016, with a new CEO and “flatter” leadership team, bring on more?

From what Robbins keeps saying, we’re thinking maybe so.

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