John Chambers, CEO of Cisco Systems Inc. (CSCO), told staff via an internal memo that has since been published, that the consumer electronics, networking, voice, and communications technology and services company needs to combat problems with “operational execution,” and that Cisco has been “slow to make decisions.”
Chambers also wrote that the company has lost credibility, “disappointed” investors, “confused” employees and that it’s time to make “bold steps and tough decisions.”
The note by Chambers came after a class-action lawsuit was announced last week against Cisco that alleges the company failed to disclose all information concerning the true financial situation of the networking giant from the dates between May 12, 2010 and Feb. 9, 2011.
Stocks in Cisco have been rocky through the last year, with shares at $26.34 this time a year ago and closing at $18.07 yesterday, revealing a decline of 34%. Speculation that the company will do away with its consumer division, which includes the Flip video camera and Lynksys home networking products, is increasing in the wake of the memo.
Investors say selling off or restructuring the consumer division and axing some of the approximately 30 new business ventures added in the last few years would allow Cisco to focus on higher-margin networking equipment, where the company excels and pulls in around half of its revenue.
Chambers wrote that the company will continue a focus on five tenets of the company that will remain unchanged in the areas of core routing, switching and services; collaboration; data center virtualization and cloud; architectures; and video.
