Today: NetApp CEO Tom Georgens is replaced, and incoming Cisco CEO Chuck Robbins confirms the departure of two top Cisco execs as shake-up begins. Also: Intel finally pulls trigger on purchase of Altera.
The Lead: NetApp switches CEOs, Cisco exec shake-up coming
Two of Silicon Valley’s largest tech companies decided to shake up their executive suites Monday: NetApp named a new CEO, and Cisco’s incoming leader detailed plans for change.
Just after the markets closed Monday, Sunnyvale’s NetApp announced that Tom Georgens would be replaced at the helm of the data-storage company. George Kurian, formerly the executive vice president for product operations, was named the company’s new CEO.
“These changes are aimed at speeding the company’s movement to its next phase of innovation and growth,” Mike Nevens, a NetApp director who took over Georgens’ other role as chairman of the board, said in Monday’s announcement. “While we intend to conduct a CEO search, we have the utmost confidence in George’s ability to lead the company, given his deep knowledge of NetApp and support from a strong executive team.”
“On behalf of the board and everyone at NetApp, I sincerely thank Tom for his many valuable contributions over the past 10 years,” Nevens added; Georgens did not provide a statement for the announcement.
The change comes less than two weeks after Georgens admitted in NetApp’s quarterly earnings release that “we are not satisfied” with the company’s financial performance. The company at that time detailed plans to lay off 500 employees, almost exactly two years after dismissing 900 workers, nearly a quarter in Sunnyvale.
NetApp did not respond to request for further comment, and did not announce a conference call to discuss the changes.
NetApp is the 16th largest public tech company in Silicon Valley, but revenues fell 2.5 percent in 2014 while the company’s debt load shot 50 percent higher to nearly $1.5 billion. The company trimmed capital expenditures more than 15 percent and reduced its workforce and research and development costs to squeak out a 1.3 percent profit gain.
NetApp stock — which has declined more than 20 percent in 2015 — fell 0.7 percent to $33.15 Monday, then dropped lower than $33 in late trading after the announcement.
Earlier Monday, incoming Cisco Systems CEO Chuck Robbins confirmed the departure of two top executives who may have been his competitors in the race to replace John Chambers at the helm of the San Jose networking giant. President and Chief Operating Officer Gary Moore and President of Development and Sales Rob Lloyd — who have a combined 35 years at Cisco and were both atop Robbins in the chain of command before he was named to replace Chambers last month — will step down as of July 25.
However, the changes may not end there: Recode reported later Monday that Padmasree Warrior, Cisco’s chief technology officer and one of the most prominent female executives in Silicon Valley, would also leave the company.
“Going forward, we will move to a flatter leadership team designed for the speed, innovation and execution that is required of us over the next decade,” Robbins said in a blog post, adding that he will announce his new organizational approach and leadership team within two weeks.
Cisco spokesman David McCulloch reiterated Robbins’ plans for a later announcement when asked about Warrior’s reported departure Monday, adding, “In the interim, we will not be commenting on any rumors about who will be on that team.”
Cisco, the fifth largest Silicon Valley tech company, fell 0.4 percent to $29.18 per share Monday on Wall Street.
SV150 market report: Intel and Altera reach $16.7B agreement
Wall Street indexes started the week with gains Monday, after the long-rumored pairing of Intel and Altera came to fruition.
Intel agreed to buy San Jose chip company Altera in the Santa Clara chipmaker’s biggest acquisition in its history, a $16.7 billion purchase that the company said will boost its business in the Internet of Things and cloud-focused data centers. Talks were first reported in late March, but were allegedly called off after Altera turned down an offer of $54 a share, presumably hoping for more amid a massive wave of consolidation in the chip industry. After Avago purchased Broadcom last week for $37 billion, however, the two sides agreed to the $54 share price in a deal that analyst Jack Gold said “makes sense.” “Intel is trying to branch out and be in as many markets as it can, given that the chip business is much different than it was years ago,” Gold said Monday. Intel dropped 1.6 percent to $33.90, while Altera gained 5.8 percent to $51.68.
Apple added 0.2 percent to $130.54 amid more reports about the Cupertino company’s plans for next week’s Worldwide Developers Conference in San Francisco: The Wall Street Journal reported that Apple is willing to cannibalize its iTunes album sales for a subscription streaming-music business, while Recode said Apple won’t unveil a streaming-television service. Netflix dropped 0.2 percent to $623.03 after Vice reported the Los Gatos company was testing advertisements on its streaming service, but Netflix later said that the ads were promotions for its own series and that it was still opposed to selling advertising. GoPro, which announced drones and virtual reality hardware last week, divulged a new $299 camera with a touchscreen Monday, and shares popped 5.5 percent higher to $58.52 despite some security concerns. Facebook gained 1.4 percent to $80.29 after the Supreme Court threw out a conviction based on Facebook posts, and LinkedIn jumped 3 percent to $200.86 amid activist-investor chatter. Google added 0.4 percent to $533.99 after showing off a new privacy dashboard, and Palo Alto Networks increased 0.5 percent to $170.34 after lining up new office space in Santa Clara. Adobe added to its software’s 3-D capabilities with the acquisition of San Francisco-based Mixamo after moving 1 percent higher to $79.87, and eBay jumped 2 percent to $62.56 after hiring a new communications leader.
Up: GoPro, LinkedIn, Intuit, eBay, Gilead, Facebook
Down: Juniper, Intel, Pandora, AMD, SunPower, Yelp
The SV150 index of Silicon Valley’s largest tech companies: Up 7.95, or 0.44 percent, to 1,804.13
The tech-heavy Nasdaq composite index: Up 12.9, or 0.25 percent, to 5,082.93
The blue chip Dow Jones industrial average: Up 29.69, or 0.16 percent, to 18,040.37
And the widely watched Standard & Poor’s 500 index: Up 4.34, or 0.21 percent, to 2,111.73
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