Cisco Streamlines ... Again

SAN JOSE, Calif. ( TheStreet) -- Cisco ( CSCO), wrestling with execution problems and slumping shares, announced another round of restructuring Thursday.

Just ahead of its fiscal third-quarter earnings next week, Cisco said it will aim to streamline its sales, services and engineering organizations, according to a statement released before market open.

Following several quarters of weak sales and guidance, the networking giant is attempting to get its business back on track and satifsy investors.
Cisco CEO John Chambers has announced more restructuring at the under-pressure networking giant.

"Cisco has driven transformational change before, and we are again transitioning to the next stage of the company's evolution," said Cisco CEO John Chambers, in the statement. "It's time to simplify the way we execute our strategy, and today's announcement is a key step forward."

As part of this newest change, Cisco's worldwide field operations will be organized into three geographic regions; Americas, EMEA and Asia Pacific/Japan/Greater China. This, said Cisco, will drive faster decision making and better align its businesses.

Cisco's services business will re-organize around key customer segments, and will become more closely aligned with its field operations segment.

The company is also reshuffling its engineering division, creating a dedicated emerging business group, led by senior vice president Marthin De Beer. This group will focus on "select early-phase businesses" and will integrate Cisco's Medianet video technology across the company.

In a clear nod to critics who have slammed Cisco's agility, the firm also announced plans to reduce the number of internal decision-making "councils" from nine to three, with specific focus on enterprise, service providers and emerging countries.

"These councils will serve to further strengthen the connection between strategy and execution across functional groups," explained Cisco, in its statement. "Resource allocation and profitability targets will move to the sales and engineering leadership teams which will have accountability and direct responsibility for business results."

Most of the changes announced by Cisco on Thursday will take effect within the next 120 days, and the company says that it will have its new sales organization in place at the start of its fiscal 2012 on July 31.

Last month, Chambers admitted that the networking behemoth had disappointed investors, and vowed to turn the company around.

Two consecutive quarters of weak outlook had raised big questions about Cisco's long-term strategy, and the company's stock is down almost 34% over the last 12 months.

Since then, Chambers promised to throw resources at the company's video efforts and started to remold the firm's problematic consumer business.

Cisco shares were rising 7 cents in midday trading Thursday to $17.54.

--Written by James Rogers in New York.

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