"Cadence is in trouble," said Gary Smith founder and chief analyst for Gary Smith EDA. "I think they have really run out of time for a 'save-Cadence-as-it-is project'. Now it's a rebuilding project."

Fister's tenure may be remembered as one of ambition and, perhaps, overreaching. His term was marked by two bold bids that ultimately failed—one to sell Cadence to private equity companies in 2007 and another to buy third-ranked EDA vendor Mentor Graphics Corp. earlier this year.

In July, Cadence cut its fiscal year revenue guidance by 25 percent and said it expects to report a third quarter loss of 25 to 27 cents per share. Rumors have been circulating that Cadence may cut as much as 25 percent of its workforce.

Michael Fister

The departure of Fister is not surprising to the rest of the EDA industry. He was rumored for months to have been interviewing for other positions, including the top job at Freescale Semiconductor, which eventually went to Richard Beyer, former CEO of Intersil Corp.

"The sense was that after the Mentor bid broke off and the company did a substantial guidance reset, his backing from the board was not entirely clear," said Rich Valera, an analyst at Needham & Co. "Nor, frankly his interest in what would obviously be a very lengthy turnaround process."

What is more surprising, according to Valera, is that the shakeup includes all of Fister's top lieutenants—executive vice presidents, Kevin Bushby, James Miller, William Porter and R.L. Smith.

"I've never seen anything like this," Valera said. "I've never seen a company essentially clear the decks like this, certainly not an EDA company."

Smith said the executives, with the exception of Miller, had to go. "That was sort of the group that really was responsible," Smith said.