News & Analysis
Analysis: With Fister gone, Cadence layoffs may be next
Dylan McGrath
10/15/2008 2:55 PM EDT
Valera said the next big data point awaited by Wall Street is how many workers will be laid off in what has been characterized by Cadence as an aggressive restructuring. Valera said he initially thought Cadence would cut 10 to 15 percent of its workforce, but noted that there have been consistent though unconfirmed rumors that the cuts will be more like 20 to 25 percent. Valera said its rare for a large EDA company to make cuts of that magnitude.
Valera said he expects Cadence to provide exact numbers during its earnings call scheduled for Oct. 22. "They've basically promised that to The Street," Valera said. He added that he expects the cuts to be across the entire company, noting that Cadence has been clear that they will include deep cuts in R&D.
Smith wondered if the management shakeup would delay the layoff announcement. Cadence may hold off on making deep cuts until a new management team is in place, he said. Cadence has announced an Interim Office of the Chief Executive to oversee the day-to-day running of the company's operations.
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The San Jose company also will likely update its outlook on Oct. 22, Valera said, noting that the macroeconomic outlook has probably deteriorated since Cadence provided guidance on its second quarter results.
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StrategyKinetics
10/16/2008 2:05 AM EDT
As Kevin, Dr. Tan and Dr. Shoven look for the next CEO, I think there are a few lessons from the past 4 years that are very evident about running a company such as a Cadence:
1. Cadence may be very small compared to a division in a large company such as an Intel but it is a very complex diversified company -- the strategic/operational experiences of a single product division don't directly translate. The learning curve for outsiders is very long. The most analogous industry to EDA is Enterprise-SW -- Even complex diversified Enterprise-SW companies such as SAP and Oracle have very different ECO-systems and business strategies. The experience doesn't translate very easily.
2. Cadence needs a CEO who will not need another 2-4 years to figure out what's real and what's BS? Believe me, there is a lot of BS that gets airtime, especially during these periods of transition.
3. The next CEO will likely have to be a bold thinker. Cadence should dispassionately assess what does it want to be. Is it really better off continuing to be a broad-line supplier or should it become a smaller, more differentiated company and spin out other businesses in the portfolio. The broad scope is actually leading to mediocrity across the portfolio. Cadence has a large portfolio of undifferentiated me-too products that provide Cadence with mass but not strength (differentiation). If it chooses to remain a broad-line supplier, even then it must evolve it's portfolio to remain competitive.
Unless the BoD can convince Carrol Bartz or a Joe Costello or even Tony Zingale to lead Cadence, they are better of finding an EDA veteran who has GM level experience of a large business in EDA. The few names that come to mind are:
* Moshe Gavrielov -- Already the CEO at Zilinx. Probably not interested
* Sanjiv Kaul -- He was the GM of Synopsys' Implementation business during its growth phase in the late Nineties and early part of this decade. He has also significant leadership experience in the Verification and DFM parts of EDA
* Roy Jewel -- I remember that ~6-7 years ago Magma started to gain traction in the market soon after Roy joined them as a COO after his successful stints at Avant and TMA before then. I remember it as I was at a competitor who was focused on Magma.
Other EDA executives who could/should be on the short list:
* Wally Rhines -- Via merger with Mentor
* Manoj Gandhi -- Long, steady, successful stint at the helm of the Verification business at Synopsys. The SystemVerilog and VCS-NTB turned the tables on Cadence and Verisity -- Not easily done.
* Joe Swicki -- Long successful stint as the GM of Mentor's Physical Verification + DFM business. Don't know much more than that.
* Penny Hersher -- Don't know much about her.
* John Chilton -- Played a lot of different Estaff roles at Synopsys
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daleinaz
10/23/2008 8:17 PM EDT
$26 million for five executives! Or for the same money, you could hire 170 engineers at $150k each. Wonder which would do more for the company...
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