Juniper Rolls Out New Operating Plan, $3 Billion Buy Back Plan
The vendor's integrated operating plan comes as shareholders put pressure on the company to improve its finances.Juniper Networks officials, under pressure from shareholders to make changes to its business operations, is unveiling a new plan that calls for streamlining its product portfolio, reducing operating expenses and returning more money to investors. Shaygan Kheradpir, who took over as CEO of the networking technology vendor in January after being hired in November 2013, introduced the company's integrated operating plan Feb. 18, saying during a conference call that "this plan is focused on accelerating growth and increasing shareholder value." It will lead to a "more focused, connected, agile and execution-oriented company," he said. Kheradpir said the company will look to leverage its expertise in networking routing and switching, security, control and network management to offer solutions for what the CEO called highly automated and secure "high-IQ networks" found in the growing numbers of private and public clouds that are being built. In addition, the company will grow its margins, reduce the percentage of revenues being spent on R&D and return as much as $3 billion to investors. The moves dovetail with demands put forth last month by Elliot Management, an activist investment firm that owns about 6.2 percent of Juniper's stock. In a statement and presentation released in January, Elliot officials said that Juniper's product lineup was strong, but that its stock was underperforming, and outlined steps they wanted the networking vendor to take to improve its financials and give more money back to investors.
Those steps range from reviewing the product portfolio—including its security offerings—to cutting $200 million in expenses by squeezing costs from R&D, salaries and other areas. The hedge fund operator also suggested the company not make any more acquisitions for a while in order to focus more on executing on current strategies.