By Eva Dou
BEIJING-- Cisco Systems Inc. plans to remove several of its
senior executives in China, as sales slide because of government
fears about the security of foreign networking equipment, people
briefed on the matter said.
The shake-up flattens the China organizational structure and
falls in line with a global reorganization at Cisco after longtime
Chief Executive John Chambers announced last month he would hand
the reins to another Cisco veteran, Chuck Robbins.
Mr. Robbins has said he wants a structure that can make
decisions more quickly. This month he shrank his core management
group from 13 members to 10, eliminating a layer of presidents.
Several senior executives in China have been asked to step down,
including Hahn Tu, Cisco China president, and Fredy Cheung, vice
president in Greater China, people briefed on the matter said.
Neither could be reached for comment. It wasn't immediately clear
whether the positions will be eliminated or if they will be
replaced.
Cisco Greater China Chairman Owen Chan will remain, the people
said.
Cisco's China sales fell 20% in the quarter ended April 25 from
a year earlier, compared with the company's 5.1% global revenue
gain. Its share of the router market in the country fell to 9.4% in
the first quarter from 21.2% a year earlier, with the lost sales
going to local rival Huawei Technologies Co., according to
Bernstein Research.
The sales decline is largely due to the Chinese government's
efforts to shift to local technology after former U.S. National
Security Agency contractor Edward Snowden alleged in 2013 that the
NSA covertly put surveillance tools in some U.S. technology
products sold overseas, people familiar with the matter said.
Cisco is grappling with broader challenges, such as rising
competition from software-based alternatives to its hardware.
Mr. Robbins said in a blog post on June 4 he planned to look
outside the company to fill several key jobs to build Cisco's
position in new markets.
Ted Greenwald contributed to this article.
Write to Eva Dou at eva.dou@wsj.com
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