The US-based telecom gear maker Juniper Networks plans to cut more than 400 jobs. These planned layoffs will be across the company’s locations globally. According to a statement, the company will be incurring a cost of $59 million as a result of these job cuts. Of this, severance and termination expenses will likely comprise $40 million. In addition, in a recent filing with the US Securities and Exchange Commission (SEC), Juniper expects to incur other restructuring and related costs of approximately $19 million.
What SEC filing says about job cuts
“The [plan] is the result of a thorough review of the Company’s business objectives, and is intended to focus on realigning resources and investments in long-term growth opportunities,” Juniper said in the filing. “The Company believes the Plan will further allow it to continue to prudently manage operating expenses in order to deliver improved operating margin,” the statement added.
Juniper said that it expects the layoffs to be “substantially” completed by the end of the first quarter of fiscal 2024 in March, but the company warned that certain potential position eliminations are subject to local law and consultation requirements, which may extend the workforce reduction process beyond that date in certain countries.
Job cuts part of restructuring plan
The job cuts are part of a restructuring plan Juniper announced earlier this year. The network gear maker, and one of the early adopters of artificial intelligence (AI), reported $1.43 billion in revenue in Q2, up by 13% year-over-year and up 4% on a sequential basis. Its cloud business slumped 6% year-over-year in the second quarter while the service provider business grew marginally at 1% year-over-year.
The company’s chief executive Rami Rahim in the second quarter earnings call said, “I remain extremely encouraged by the momentum we’re seeing in our enterprise business, which delivered record revenue results and accounted for more than 45% of our total revenue, representing both our largest and fastest growing vertical for a third consecutive quarter.”
“….given the digestion of prior purchases, and the uncertain timing of customer deployments, particularly amongst some of our larger cloud customers, we have less visibility, and our revenue results are likely to be pressured over the next few quarters. Based on these dynamics, we are reducing our full year revenue growth forecast. We remain committed to delivering improved profitability and still expect to deliver greater than 100 basis points of operating margin improvement in 2023,” Rahim had said.
What SEC filing says about job cuts
“The [plan] is the result of a thorough review of the Company’s business objectives, and is intended to focus on realigning resources and investments in long-term growth opportunities,” Juniper said in the filing. “The Company believes the Plan will further allow it to continue to prudently manage operating expenses in order to deliver improved operating margin,” the statement added.
Juniper said that it expects the layoffs to be “substantially” completed by the end of the first quarter of fiscal 2024 in March, but the company warned that certain potential position eliminations are subject to local law and consultation requirements, which may extend the workforce reduction process beyond that date in certain countries.
Job cuts part of restructuring plan
The job cuts are part of a restructuring plan Juniper announced earlier this year. The network gear maker, and one of the early adopters of artificial intelligence (AI), reported $1.43 billion in revenue in Q2, up by 13% year-over-year and up 4% on a sequential basis. Its cloud business slumped 6% year-over-year in the second quarter while the service provider business grew marginally at 1% year-over-year.
The company’s chief executive Rami Rahim in the second quarter earnings call said, “I remain extremely encouraged by the momentum we’re seeing in our enterprise business, which delivered record revenue results and accounted for more than 45% of our total revenue, representing both our largest and fastest growing vertical for a third consecutive quarter.”
“….given the digestion of prior purchases, and the uncertain timing of customer deployments, particularly amongst some of our larger cloud customers, we have less visibility, and our revenue results are likely to be pressured over the next few quarters. Based on these dynamics, we are reducing our full year revenue growth forecast. We remain committed to delivering improved profitability and still expect to deliver greater than 100 basis points of operating margin improvement in 2023,” Rahim had said.
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