Juniper Networks, which has had several quarters of disappointing financial numbers, reportedly is cutting 500 jobs, or about 5 percent of its workforce.
According to a report in TechTarget, many of the affected jobs are in connection with the company’s much-touted QFabric, a network switching platform the company introduced last year that is designed to simplify the data center infrastructure.
However, a Juniper spokesperson disputed that claim, saying that the job cuts are across the company's businesses and do not target the QFabric business in particular. Juniper executives are committed to the QFabric solution, the spokesperson said.
The QFabric switching platform—once known by the code name Project Strata—is designed to collapse the networking infrastructure from the traditional three layers into a single layer, simplifying the overall network and making it easier to deploy, manage and scale. The QFabric initiative has been lauded by analysts for its technology, but sales reportedly have not been what Juniper executives had hoped for.
According to Network World, about 200 customers have embraced QFabric, though it’s not clear how many of those are deploying the full QFabric solution and how many are just buying part of it, such as the 10 Gigabit Ethernet QFX3500 switch, which was the first product in the QFabric initiative. Juniper announced Sept. 28 that Qihoo 360 Technology, a Chinese Internet and mobile services provider, had built a new data center based on the QFabric architecture.
A Juniper spokesperson confirmed to TechTarget that there were layoffs, but declined to say where those job cuts will occur or how hard hit the QFabric team will be.
In an emailed statement, a Juniper spokesperson noted that executives during their conference call with analysts and journalists in July about the company’s second-quarter financial numbers said they were working to align Juniper's “resources to improve productivity and effectiveness, enabling us to deliver our road map for innovation and unprecedented value to customers and shareholders. As a result of this important initiative, we are reducing our workforce by approximately 500 people in functions across the company."
During the quarter, Juniper earned $58 million on revenue of $1.07 million, a 4 percent drop from the same period in 2011. During the conference call to talk about the numbers, Executive Vice President and CFO Robyn Denholm said the company was happy with the growth of all three lines of its switching business, noting that “EX, QFabric and wireless LAN were all up sequentially and year-over-year.”
CEO Kevin Johnson said that the number of Internet users and connected devices continues to drive up the amount of network traffic and the interest in Juniper’s technology. However, Johnson said that interest is tempered by the uncertain global economy, which has led some businesses to hold back on some IT spending. He said he is confident in the company’s direction, but that Juniper would have to “[align] our overall cost structure for efficiency and effectiveness.” He did not mention layoffs during the call.
At the end of the second quarter, Juniper had 9,373 employees, according to Denholm.
Juniper is not the only top-tier networking vendor looking to job cuts to help offset changes in their business. In July, Cisco System executives announced another 1,300 layoffs, blaming the move on the global economy and weak corporate IT spending. That came a year after the networking giant announced 6,500 job cuts as part of a larger restructuring effort.
Days after Cisco announced the 1,300 job reduction, Alcatel-Lucent executives said they were cutting 5,000 positions in hopes of stabilizing their financial situation. The company has been struggling since the 2006 merger of Alcatel and Lucent.