Juniper is laying off 6 percent of its employees

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Juniper Networks is going to cut 6 percent of its employee base as part of a broader restructuring effort in the wake of a call from its activist shareholder Elliot Management to cut costs.

The company said the majority of the layoffs, which are “immediate,” would affect middle management positions. It added that it expects to incur a $35 million cash charge related to severance and other expenses during the first quarter.  

In an SEC filing, it said that it has developed an “integrated operating plan,” or IOP, that’s focused on high-growth segments and right-sizing certain functions. This IOP Enhanced operational efficiency expected to result in a 25 percent operating margin for 2015. 

Juniper is also going to stop the development of an application delivery controller technology licensed in July 2012. It said this move will result in an $85 million impairment charge in the first quarter of 2014, but will not impact revenues.

Besides the job cuts, it will also reduce costs through consolidating facilities, reducing marketing programs and other asset restructuring. Through this process, the vendor will dispose of about 300,000 square feet of leased facilities, representing 12 percent of Juniper’s global facilities square footage.

Juniper said the cost of consolidating facilities is expected to be $70 million over the full year. It expects about $20 million in additional restructuring charge later in fiscal 2014.

This restructuring is in part a response to a call made by activist shareholder Elliot Management in January, who said Juniper needs to reduce costs and return more money to shareholders.

In a filing, Elliot suggested that Juniper should launch a program to reduce annual costs by $200 million and repurchase $3.5 billion in shares by the end of 2015.

This is not the first time that Juniper had to reduce its employee headcount to reduce costs. It took a similar action in the third quarter of 2013 when it announced it would cut 3 percent of its workforce.

For more:
– Reuters has this article

By Jarrett Neil Ridlinghafer 
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