Cisco Systems Inc. on Monday said Executive Chairman John Chambers, who led the network-equipment company for more than two decades and through two U.S. recessions, won't stand for re-election later this year.
Mr. Chambers has been chairman since 2006 and executive chairman since July 2015, when he gave up the role of chief executive to Chuck Robbins, a 17-year company veteran. Still, he remained a presence on the executive floor at Cisco's San Jose, Calif., headquarters.
While at the helm, Mr. Chambers built Cisco into the networking leader with a market value at one time exceeding $500 billion. In recent years, the company has grappled with layoffs as it faced increasing competition from upstart rivals such as Arista Networks Inc. and Juniper Networks Inc.
Mr. Chambers, 68 years old, began discussing a transition with Cisco's board the past few months, and notified members of his decision in an email Wednesday. Cisco plans to appoint Mr. Robbins, 51, as chairman when Mr. Chambers's term expires at the annual shareholders meeting on Dec. 11.
"It is time for Cisco to move on to its next generation of leadership," Mr. Chambers said in his email to board members. "It is also time for me to move on to the next chapter of my life, on both a personal and business level."
Mr. Chambers joined Cisco in 1991, the year following the company's initial public offering, as senior vice president of world-wide sales and operations. The company grew quickly in the ensuing decade, powered by the unfolding dot-com era, as it sold the hardware that made it possible for companies to send data quickly over the internet and through corporate networks.
Mr. Chambers managed through the turmoil, shedding 18% of Cisco's staff in March 2001. He leaned on those lessons in the years that followed, being among the first CEOs to warn of impending economic problems in late 2007 and steering Cisco through the 2008 recession.
During his years as CEO, Mr. Chambers delivered a 1,600% return to shareholders, including dividends. Based mostly on shareholder return, Harvard Business Review in 2015 named Mr. Chambers the second-best performing CEO in the world out of 907 executives.
Mr. Chambers delivered that return in the face of a major shift in Cisco's largest market, the business of selling network switches that link computers on corporate networks.
While the market for switching hardware has risen about 16% to $24.4 billion between 2010 and 2016, Cisco's annual sales in that department remained relatively flat at about $13.9 billion.
Mr. Robbins has sought to move Cisco beyond legacy hardware into software and services. The company bumped up research-and-development spending by $400 million to $6.3 billion after he took over as CEO, expanding the company's reach in security, analytics and automation.
In June, Cisco revealed a new security service it says can identify and stamp out malicious software cloaked by encryption on computer networks. The company is counting on this new service to help drive sales of its switches.
Neither Mr. Chambers nor Cisco shared details about his next plans. Mr. Chambers has been deepening his involvement in emerging technologies such as drones. Earlier this year he co-led a $15 million funding round in drone security startup Dedrone Inc. He also invested last year in enterprise drone services startup Airware and joined its board.
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(END) Dow Jones Newswires
September 18, 2017 14:15 ET (18:15 GMT)