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CEO resigns from Cabletron

In a surprise announcement, Cabletron says Donald Reed has resigned as chief executive officer and president, effective immediately.

In a surprise announcement, Cabletron (CS) said today that Donald Reed has resigned as chief executive officer and president, effective immediately.

Reed will be replaced by Craig Benson, chairman and cofounder of Cabletron. Reed will remain at Cabletron as a consultant and board member.

The news comes after Cabletron posted a net loss of $6.3 million for the fourth fiscal quarter, compared with a profit of $72.6 million for the like quarter a year earlier. On March 2, Cabletron warned that it would post weak earnings for the quarter, which sent its stock tumbling. Cabletron stock fell 3/8 of a point to close at 14-7/8 today, near a 52-week low. Also, last week Cabletron said it would lay off 180 employees.

Reed was appointed CEO last August and was trumpeted as the executive that would take the firm to "the next level."

"I am proud to have been instrumental in developing a planning process designed to achieve specific business goals to help change the strategic course of Cabletron for the future," Reed said in a statement.

Benson said in a conference call that Reed was not familiar with the fast pace of the networking business, or its particulars, and ended up leaning on his own years of expertise. "Every day you waste in the networking business is light years in other businesses," he noted.

Benson, who helped found the Rochester, New Hampshire-based company, said his return to daily management of the firm will not be an interim move. Reed will remain with Cabletron as a consultant and member of the board, overseeing broad strategic issues, according to Benson.

"It was a joint decision," a Cabletron spokeswoman said.

Cabletron also announced that John d'Auguste, executive vice president of Cabletron's enterprise business unit, has been promoted to president of operations. David J. Kirkpatrick, senior vice president of finance and CFO, has been promoted to corporate executive vice president of finance.

Benson said that Kirkpatrick likely will play a larger role in overseeing Cabletron's manufacturing operations, adding that d'Auguste will handle engineering and sales, as well as other business areas.