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Juniper Cuts Headcount by 6%, Axes ADC

Ray Le Maistre

Juniper Networks is making 6% of its employees, about 570 staff, redundant as part of its ongoing operational review, with many of the job cuts affecting middle management positions.

The "majority of these reductions are immediate," the company stated in a filing with the Securities and Exchange Commission (SEC) , also noting that the job cuts will result in fiscal first-quarter charges of around $35 million.

Juniper Networks Inc. (NYSE: JNPR) is also discontinuing the development of its application delivery controller (ADC) technology, which was built using technology licensed from ADC specialist Riverbed Technology Inc. (Nasdaq: RVBD) and which generates no revenues for Juniper. (See Juniper Taps Riverbed for Enterprise Help.)

Shutting down that development, and ceasing the licensing agreement, will cost Juniper $85 million.

The job and portfolio cuts are part of Juniper's efforts to revamp its operations and cut annual costs by $160 million per year following pressure from activist investor Elliott Management. Only days into his new job, Juniper CEO Shaygan Kheradpir found himself under intense and very public pressure from Elliott in early January, and subsequently announced the company's integrated operation plan (IOP) in mid-February. (See Juniper Bows to Investor Pressure, Refocuses, Juniper CEO Preps New Roadmap, and Investor to Juniper: 'You Suck'.)

Further action is to come. Juniper also noted in its SEC filing that "additional actions and restructuring charges are expected to be taken in the second quarter and the balance of fiscal 2014, including facilities consolidations, marketing program reductions, and other asset restructures." The company said it plans to "consolidate its facilities" by cutting its leased building space by 300,000 square feet, about 12% of the company's global total. These reductions will incur charges of about $70 million, Juniper estimates.

Juniper says it will discuss these actions on its next earnings conference call on April 22.

For more on Juniper:

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

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User Rank: Blogger
4/3/2014 | 9:29:29 PM
In other news...
This sounds like another bit of bad news for Riverbed in the highly competitive ADC market.
User Rank: Blogger
4/3/2014 | 2:32:02 PM
Inevitable but worrying times
This was on the cards given the announcements in February but the air of uncertainty is going to still be hanging over Juniper staff after this, with furthewr cuts to come and site closures. Best that the management gets it done as soon as possible if they feel they have to do it at all.
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