Star Cisco Engineers Resign After Reorganization

The departure of the famed "MPLS" team, best known for the company's "spin-in" strategy, marks the latest round of executive exits from Cisco Systems.

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Four Cisco Systems executives best known for leading the company's unique "spin-in" strategy that led to the development of products including its answer to software-defined networking have now become the latest officials to leave the giant networking vendor.

Mario Mazzola, Prem Jain, Luca Cafiero and Soni Jiandani—who had been nicknamed "MPLS" because of their initials and in apparent reference to the networking technology developed by Cisco—are the latest in a series of high-ranking executives to leave the company since Chuck Robbins took over as CEO 2015.

According to an internal memo sent by Robbins and obtained by The Wall Street Journal, the MPLS team has resigned and will leave the company June 17. The resignations come a week after Cisco announced that the four executives—who had been senior vice presidents and had led the Insieme Networks unit—would become advisers to Cisco as part of a larger, ongoing reorganization of the vendor's management under Robbins.

Robbins' memo reportedly said that the decision by the four executives to resign was "based on a disconnect regarding roles, responsibilities and charter that came to light immediately after the announcement." The CEO also praised Mazzola, Jain, Cafiero and Jiandani, noting he had "personally learned so much from them, and they will always be an important part of Cisco's engineering story. Their legacy will live on through our ongoing innovation and the talented engineering leaders they have mentored."

There had been a lot of speculation about who would succeed Chambers in the years before his retirement as CEO. Robbins was announced as Chambers' successor in May 2015, and two months later he took over the position. Soon after, executives began leaving, including presidents Rob Lloyd and Gary Moore and CTO Padmasree Warrior. In February, Robbins reorganized Cisco's 25,000-member engineering team into four units focusing on networking, cloud services, security and the Internet of things (IoT).

Most recently, Cisco changed the roles of those on the MPLS team. The executives—who all came to Cisco in 1993 in the acquisition of Crescendo Networks, which led to the acceleration of Cisco's network switch business—became wealthy through the “spin-in” strategy favored by Chambers. Three times while at Cisco Mazzola, Jain, Cafiero and Jiandani were placed in charge of running a startup company that was funded and supported by Cisco with the mission to create a particular technology. When the spin-in company hit certain financial metrics, Cisco bought the company and brought it back into the fold.

The last time the spin-in strategy was used was with the Insieme unit, which developed the company's Nexus 9000 switches and helped map out Cisco's software-defined networking (SDN) efforts, including the Application Centric Infrastructure (ACI) initiative. Cisco initially spent about $100 million to get the startup running in 2012 and bought the company for $863 million a year later.

The MPLS team reported directly to Chambers. However, as part of the recent reorganization, Cisco created the Networking and Security Business Group and put Insieme into the business under Senior Vice President David Goeckeler.

While the spin-in strategy led to some important products, it reportedly generated discontent among some engineers, who saw some of their peers getting wealthy through opportunities that were never available to them. Robbins is on record saying that he doesn't like the spin-in idea, and the move to push it aside can be seen as another example of his tightening control of the company despite Chambers remaining as Cisco's high-profile executive chairman.