Enterprise networking vendor Juniper Networks will reduce its global workforce by 6 percent and focus on its high-growth businesses. It competes with Cisco, HP and Huawei, among other vendors.
The company is under pressure from investor Elliott Management Corp to slim down.
On 24 January 2014, Juniper Networks said it reduced 231 jobs by spending $13.9 million. It eliminated 240 exhibitions, of which 112 were in R&D and 95 in sales and marketing.
Juniper Networks CEO Shaygan Kheradpir had indicated that there will be more such initiatives in the pipeline.
The company had 9,483 full-time employees as of December 31. Juniper said most of the cuts would impact middle management positions and that it expected to incur cash charges of about $35 million in the first quarter, related to severance and other expenses.
Juniper also said it would stop development of the application delivery controller technology, which helps remove excess load from servers, resulting in a non-cash intangible asset impairment charge of about $85 million, Reuters reported.
The company said it plans to consolidate its facilities, disposing of about 300,000 square feet of leased facilities, and record restructuring charges of about $70 million beginning in the second quarter.
Cisco is one of the rivals of Juniper Networks. The first quarter revenue of Cisco fell 1.8 percent to $12.1 billion. Its net income decreased 4.6 percent to $2 billion. Cisco enterprise grew 2 percent and commercial rose 1 percent. Public sector declined 1 percent. Cisco switching business grew 3 percent. Wireless revenues rose 8 percent.
On 31 March, Huawei, the Chinese IT and telecom network vendor, said its enterprise revenue increased 32.4 percent to $2.45 billion.
Juniper is expected to record other non-cash asset write-downs of about $10 million in the first quarter and that it expects to carry out more restructuring in the second quarter.
The company said in February it expected to initiate a substantial cost reduction plan resulting in annualized operating expense savings of $160 million.
Juniper Networks is planning a 3-pronged approach to take on Cisco, HP, etc: focused R&D that matters, radical simplification on automation, and rightsizing. The company will be announcing more details later.
Juniper will be expanding its target customer base. It will add more social media companies, cable operators and social media networks to improve revenue.
Juniper Q4 revenue
The job cut is despite posting a healthy increase in revenue in the fourth quarter of 2013. Juniper Networks revenues for the fourth quarter of 2013 rose 12 percent to $1,274 million against year-ago quarter. Net income reached $151.8 million.
Juniper’s operating margin increased to 15.3 percent from 12.2 percent in the third quarter of 2013, and increased from 11.5 percent in the fourth quarter of 2012.