Reading Cadence's tea leaves

Gabe Moretti, EETimes
(11/30/2008 4:34 PM EST)

Analysis of what might be Cadence next step.

Being a large and until recently successful company has its disadvantages: one is being in the News a lot. And so Cadence is now going through the type of experience a successful company that has hit a few hurdles is bound to endure. This is particularly evident this time of the year, when product announcements and even hard news are few. Recently the News was once again dominated by Cadence. We learned that three of their people had been promoted to executive management, that the NASDAQ had warned the company that it was not in compliance with its rules, and that a number of companies had been "booted" from its Connections program. Taken together they created a confusing picture, at least at first look.

What I find intriguing is the reason for this apparent lack of direction. Since the resignation of Mike Fister, whether voluntary or forced may be irrelevant, the company seems adrift, taking decisions that seem disconnected and short term. Clearly the "Office of the Chief Executive" is a short term position, since a triumvirate cannot govern effectively for very long, destined to be replaced by a real Chief Executive when one is found.

Then came the very predictable "cut in costs" activity. Cutting costs is an action that is meant to signify that executive management has both a grip on reality and an understanding of the business reality. As a mater of fact, cutting 10% out of almost 7000 employees, is relatively easy to do, although the after shocks are difficult to manage.

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