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Juniper Goes Indian

Light Reading
News Analysis
Light Reading
1/30/2004

Juniper Networks Inc. (Nasdaq: JNPR) is cutting part of its technical staff as it shifts some development jobs to India.

A Juniper spokeswoman says 30 jobs are being cut -- roughly 4 percent of Juniper's engineering staff -- with layoffs hitting the company's Sunnyvale, Calif., and Westford, Mass., facilities.

The layoffs would continue the trend of U.S. technology firms moving engineering jobs offshore (see Headcount: Offshoring, Dude!). But Juniper's spokeswoman stresses that none of the functions involved -- test, software development, and support -- are being moved entirely to India.

Juniper has had an office in India since July 2000; but, more significantly, the company opened a technical center in Bangalore last October. The center had an initial staff of 27, according to India Business Insight, handling software development and systems testing.

Juniper is expanding the Bangalore facility by giving it some of the functions cut from the U.S. offices. "Engineering jobs as a whole are growing" for the company, the spokeswoman says.

Juniper didn't appear overstaffed, having just reported a stellar quarter (see Juniper Confidently Carries Q4). The numbers show the company has room for improvement, however. With a revenue run-rate of $828 million per year (crudely multiplying last quarter's revenues by four) and a headcount near 1,500, Juniper generates $552,000 in annual sales per employee -- "certainly respectable, but I think that is less than what Cisco generates," says Erik Suppiger, analyst with Pacific Growth Equities Inc.

(Cisco's figure is roughly $600,000 per employee; layoffs of 100 would bring Juniper close to that number.)

Suppiger, who had no knowledge of the Juniper layoffs, says the company could also stand to improve its operating margins, which stand at 19.4 percent. "For the type of valuation this company is getting, they still need to expand their [operating] margins north of 20 percent. I'd say even high 20s," he says.

Juniper picked up the Westford office in 2002 with the $740 million acquisition of Unisphere Networks (see Juniper Nabs Unisphere for $740M and Juniper Acquires Unisphere). Westford has continued making Unisphere's ERX series of edge routers, while Juniper's Sunnyvale, Calif., home base has concentrated on the M- and T-series of routers.

Juniper stock was trading up 57 cents at $28.74 midday.

— Craig Matsumoto, Senior Editor, Light Reading

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joe_average
joe_average
12/5/2012 | 2:33:01 AM
re: Juniper Goes Indian
If anyone has any doubts that white-collar outsourcing is real, check out Juniper's Job Opportunity web page.

2 engineering jobs in the US
~20 engineering jobs in India

http://www.juniper.net/jobs/
eieio
eieio
12/5/2012 | 2:33:00 AM
re: Juniper Goes Indian
Rumor has it that Juniper's India office is really Allegro Networks India software development office and staff that they had in India.

Can someone verify?
canadian
canadian
12/5/2012 | 2:32:59 AM
re: Juniper Goes Indian
If Juniper has laid off 4% of it's workforce (30 employees), that means the total workforce is 750 people.

However, the article also hints the total number of employees are 1500. That would mean a 4% reduction would mean 60 layoffs.

Hopefully moving to India will improve Juniper's math! Or if the error is on Lightreading's part - maybe they should move some jobs to India

;-)

Just having some fun, guys!
Pete Baldwin
Pete Baldwin
12/5/2012 | 2:32:58 AM
re: Juniper Goes Indian
Hopefully moving to India will improve Juniper's math! Or if the error is on Lightreading's part - maybe they should move some jobs to India

Sorry -- 'meant to say the layoffs were 4 percent of the engineering staff. It's our typing skills that we need to outsource, apparently. :)
tsat
tsat
12/5/2012 | 2:32:58 AM
re: Juniper Goes Indian

Welcome to Capitalism. Do what the investors demand.

-tsat

>If the east coast ops are a little fat, they
>should trim there. Why the need to offshore?
>In my opinion a very un-american thing to do.
sjd6
sjd6
12/5/2012 | 2:32:58 AM
re: Juniper Goes Indian
If the east coast ops are a little fat, they
should trim there. Why the need to offshore?
In my opinion a very un-american thing to do.
digerato
digerato
12/5/2012 | 2:32:53 AM
re: Juniper Goes Indian
"If the east coast ops are a little fat, they
>should trim there. Why the need to offshore?
>In my opinion a very un-american thing to do."

and

"Welcome to Capitalism. Do what the investors demand"

We'll see how happy you are when your all-American company has to do a massive layoff because its competitor, who did move some test jobs to India, is now able to crank out better products faster since it hired more US design engineers with the money it saved.

It's simple economics -- only a Marxist would call it a capitalist conspiracy. If your competitors can build better products at the same cost or lower by having some tasks done overseas, they are going to kick your ass in the important area of profit. Remember profit? It pays your salary. Without it, we're all out of a job.

If you don't want to work for a for-profit company, go become an academic or work at a non-profit.

Digerato
jcbogle
jcbogle
12/5/2012 | 2:32:52 AM
re: Juniper Goes Indian
As most of you might be knowing Pradeep Sindhu the founder and CTO of Juniper is an Indian.
So why wouldn't he move the jobs if the engineers
there can do the same job at 1/10th price.

Also note Cisco has a huge development center
in India so it would make sense for Juniper to
move some jobs there so that they can increase
their competitiveness vis-vis cost wise.
veeja1972
veeja1972
12/5/2012 | 2:32:51 AM
re: Juniper Goes Indian
I have started a few technology companies. I saw a need last year for a Turn-around consulting company. We specialize in turning around failed off-shore ventures (from a technical perspective). I am pround to announce that we are very busy these days.

Message to American companies: If it looks to good to be true, it probably is.
change_is_good
change_is_good
12/5/2012 | 2:32:50 AM
re: Juniper Goes Indian
yea, but it is cheaper to pay 20 than 2 in the valley.
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