Cisco reorganizing sales structure 20 July, 2009 By Chris Talbot

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The change includes the forming of a new Strategic Partner Organization, according to reports. A statement issued by Cisco had few details about the changes, and the company was not offering interviews to media.

According to the statement, "Cisco has announced a reorganization of it field sales structure as of the beginning of our fiscal year, starting on August 1, 2009. The reorganization is intended to create a next-generation sales experience that is seamless, global and brings the full collective power of Cisco to our customers, partners and worldwide field teams. Ultimately, the reorganization will simplify, prioritize and make it easier to do business with Cisco for our customers and partners."

The extent of the effect this will have on Cisco's channel partners is uncertain at this point in time.

Michelle Warren, president of MW Research & Consulting, suggested that Cisco might be trying to eliminate some of the management layers that have been created as the company has continued to grow.

"One of the big struggles that a large organization ... faces is as they grew over the years they had to set up various layers of management and various siloes of business practices, so one business unit would be run a certain way and there would be layers of management ... and that would just be multiplied out across the various units. And the presidents of the various units would report in to the CEO. What's happening now and has been happening over the past couple of years is organizations such as Cisco and HP have to start cutting out the layers of middle management because the right hand is not speaking to the left hand. That's causing a lot of problems for their go-to-market strategies, but also for their customers," Warren said.

Cisco has also just announced layoffs of between 600 and 700 employees, which represents the first wave of cuts that will number between 1,500 and 2,000 workers. The first round of cuts affected Cisco's San Jose offices. Whether the layoffs are related to the upcoming sales organization is unknown, but Warren speculated that the two could be linked.

The streamlining of the sales organization is an important, but difficult, job.

"This is by no means an easy task, and it's a big job. They're cryptic in their note, but I hope they've got some consultants in-house or outsourced to help them manage this change, because it's not easy to reduce layers of management and pull siloes that are used to either competing against each other or operating independently together," Warren said.