Juniper to Cut 6 Percent of Workforce, Consolidate Buildings
Juniper Networks will cut 6 percent of its workforce, exit the application delivery controller business and consolidate facilities as part of a streamlining effort that comes as some shareholders push the networking company to cut costs and return more money to investors.
Juniper executives laid out their plans in an April 2 filing with the Securities and Exchange Commission (SEC). The moves come just weeks after CEO Shaygan Kheradpir, who took over the top post in January, outlined a strategy to focus on high-growth markets, consolidate much of its networking, security and management software into a single portfolio, reduce R&D costs and return $3 billion to investors.
The company currently has about 9,400 employees, which translates to about 560 jobs being cut. According to the SEC filing, the bulk of those job losses will be among middle management, and will be immediate. Juniper executives expect the company to take a $35 million hit for severance payments and other costs related to the job cuts. They also anticipate another charge of $85 million for exiting the application delivery controller business, in which they had been licensing technology from Riverbed Technology.
This is only the latest round of job losses at Juniper. Company officials in October 2013 said they were cutting about 3 percent of the workforce, or about 280 jobs.
Juniper has been under pressure from investors Elliott Management and Jana Partners to cut costs and return more money to shareholders. In an expansive report in January, Elliott officials lauded Juniper's strong product lineup, but said the stock was underperforming and outlined steps—from reviewing the product portfolio to cutting $200 million in expenses by squeezing costs from R&D, salaries and other areas—they wanted to see taken.
Elliott officials also suggested Juniper hold off from making any new acquisitions.
"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 in the SEC filing.
Juniper's plans to consolidate facilities will reduce its footprint by about 300,000 square feet—about 12 percent of its global facilities space.