Cisco CEO steps down after 20 years

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Cisco CEO steps down after 20 years
John Chambers

Chambers to be replaced by sales VP Chuck Robbins.

Cisco chief executive John Chambers will step down in July after 20 years at the helm of the network equipment maker.

Company veteran Chuck Robbins, 49, will take over as CEO. The 65-year-old Chambers, one of the longest-serving leaders of a Silicon Valley company and also company chairman, will become executive chairman, the company said on Monday.

Wall Street analysts said a change was expected and could signal a refocusing of Cisco, which acquired dozens of companies under Chambers but has failed to make great headway outside its core networking business.

"In many cases where the CEO has been very acquisitive, the next guy pares down and refocuses the company, and that is what I would be expecting with this change," said Kim Forrest, an analyst at Fort Pitt Capital Group in Pittsburgh.

Robbins did not immediately indicate where his focus would be.

"Over the next 90 days, I (would) actually like to listen," he told reporters on a conference call. "The market is moving too rapidly for any one individual to think they have all the answers."

Shares of Cisco, which employs about 70,000 staff, jumped 0.4 percent to US$29.24 (A$37.31) on the Nasdaq.

The company became a stock market sensation at the height of the technology boom in March 2000 when its market value passed US$600 billion, based on the company’s diluted share count at the time, and briefly topped that of Microsoft.

Chambers never managed to revive those glory days despite forays into consumer electronics and other areas. Cisco's market value is now about US$150 billion, and its annual operating profit is around where it was five years ago. It is expected to post sales of US$49 billion this year.

Cisco insisted the timing of the announcement was not related to its quarterly earnings report, scheduled for May 13, and it did not alter its financial outlook.

Chambers, a prominent Republican backer who was a co-chair for Senator John McCain's 2008 bid for president, did not indicate any plans to go into politics.

"I will probably support people (for) political office but probably not get involved myself," he told reporters.

Chambers said he started thinking about retiring as CEO about three years ago. He seemed relaxed and joked with longtime colleague Robbins during the call.

"Chuck is just an execution machine," said Chambers.

Robbins joined Cisco in 1997 and became a board member on Friday.

His previous role was senior vice president of worldwide operations, running global sales for the company. Analysts hope Robbins' elevation will mean a renewed focus on sales.

"We like that Cisco is appointing someone as CEO that has a strong sales background, and we expect the employee base to be very supportive of the appointment," said Tim Long, an analyst at BMO Capital Markets.

Cisco has been looking for a new CEO for the past 16 months, board member Roderick McGeary wrote in a company blog post.

Some industry watchers were surprised at the choice. Rob Lloyd, Cisco's director of development and sales, was more visible to investors, JMP Securities analyst Erik Suppiger said in an interview.

Chambers declined to name other potential candidates, or whether any such as Lloyd would stay at the company. Lloyd did not immediately return a request for comment.

Chambers is the second high-profile US technology executive to step aside from the top job in the past eight months. In September, database software maker Oracle CEO, Larry Ellison, announced his plan to become executive chairman.

Chambers has increased Cisco sales to about US$48 billion from US$1.2 billion since he became CEO in 1995.


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