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Cisco Loses Leading Engineers after Management Shakeup

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Top Cisco Systems, Inc. (CSCO - Free Report) executives reportedly resigned showing discontent over their changed roles under a recent reorganization.

Mario Mazzola, Prem Jain, Luca Cafiero, and Soni Jiandani, dubbed as MPLS after initials of their first names and often referred as the "heart, soul, and brains" of Cisco are legendary engineers who have created some of Cisco’s most successful products.

The Wall Street Journal (WSJ) reported on Monday that they will leave Cisco effective Jun 17. The journal cited an internal memo that said that the executives decision to leave “is based on a disconnect regarding roles, responsibilities and charter that came to light immediately after the announcement.”

All four were holding the title of senior vice president. However, as part of a management shake-up last week, Cisco altered the roles of Mazzola, Cafiero and Jain naming them as advisors to the company.  Jiandani’s title is however unchanged after the reorganization.

Business Insider previously reported that there were some tensions growing inside Cisco as employees complained about the big financial rewards MPLS team members were receiving. So the decision to relegate them to advisory roles might be an effort to reduce these tensions.  

MPLS was once the most trusted engineering team under ex-CEO John Chambers. As a part of Cisco’s “spin-in” effort, Chambers spent billions of dollars on them and their teams.

 “Spin-in” was a special arrangement that Cisco had with this group of engineers wherein they headed startups funded by the company to develop new technologies that Cisco subsequently bought back at pre-determined rates. Over the years, MPLS led startups were funded three times and later purchased by Cisco.

Currently, Cisco is a Zacks Rank #3 (Hold) stock. 

Some better-ranked stocks include Extreme Networks Inc. (EXTR - Free Report) , Netgear Inc. (NTGR - Free Report) and Radcom Ltd. (RDCM - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).

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