Juniper To Lay Off 6%
Juniper Networks expects to cut its worldwide headcount by about 6% as part of a broader plan to streamline its business and focus on high-growth opportunities, the network routing and software supplier revealed Wednesday in a filing with the Securities and Exchange Commission.
“The majority of these reductions are immediate, and a significant proportion are middle management positions,” Juniper said, estimating that it will incur cash charges of approximately $35 million for severance and other related employee termination expenses in the first quarter of fiscal 2014.
The filing did not announce how many employees would be affected, but it should be in the neighborhood of 569 based on the 9,483 full-time workers Juniper was employing at the end of 2013.
The streamlining moves, which come six weeks after Juniper announced an “integrated operating plan” and amid recent pressures from activist shareholders calling on the company to refocus its business, will also slim down Juniper’s product portfolio. Juniper said it will cease development of the application deliver controller technology licensed in July 2012 from Riverbed Technology. Juniper said that effort isn’t producing revenues, but noted that the decision will result in a non-cash intangible asset impairment charge of about $85 million in the first quarter of fiscal 2014. Juniper also expects to accrue other non-cash asset write-downs of approximately $10 million in the first quarter.
Tied to the workforce reductions, Juniper will consolidate facilities resulting in the “future disposal” of about 300,000 square feet of leased space that today represents about 12% of its global facilities square footage. Juniper said that will result in a $70 million of restructuring charges beginning in the second quarter.
Juniper said it anticipates potential additional restructuring charges of approximately $20 million to be accrued later in fiscal 2014.
Like other vendors in its market, Juniper is applying a heavier focus on software-defined networking products. Among recent bets, Juniper’s VC arm invested $10 million in Gainspeed, a technology startup focused on a “virtual” form of cable’s next-gen Converged Cable Access Platform (CCAP). Juniper is one of an initial group of vendors working with Gainspeed on an interoperable virtual CCAP.
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