By Ritsuko Ando

NEW YORK (Reuters) - Shares of Cisco Systems Inc (CSCO.O: Quote, Profile, Research) fell 5 percent on Wednesday after CEO John Chambers told Reuters many of his customers see the economy picking up early next year rather than later this year.

In the interview on Tuesday, Chambers also said the office of the chief executive will transform over time to be less hierarchical and more collaborative, prompting some investors to wonder if Silicon Valley's longest-serving CEO could be mapping out his departure.

"The thing that people were probably focused on today was ... the outlook and then secondly how long is he staying as CEO," said Jefferies analyst Bill Choi.

Cisco shares fell as low as $21.72, their lowest level on the Nasdaq since September 2006. The stock was down 4.72 percent at $21.80 in afternoon trading.

Two brokerages cut their price targets on Cisco shares on Wednesday: RBC cut its to $27 from $29, and UBS cut its to $25.50 from $27.

"Our mid-quarter checks on Cisco suggest that Enterprise spending remains challenging and there has been further slowing in the U.S., especially in the West Coast region," UBS analyst Nikos Theodosopoulos wrote in a research note.

In late May, Chambers had said that based on his conversations with customers and economic leaders, the most likely scenario would be for the economy to start picking up toward the end of this year.

In the interview Chambers said, "Most customers still see the turn probably late this year or early next year. More of them looking toward early next year."