Juniper makes 440 redundant to pursue better margins
Not even AI offers a lot of upside right now
Juniper Networks will let go of 440 staff, as part of a restructuring plan.
The cuts were revealed in a Thursday filing [PDF] that explains the vendor recently conducted "a thorough review of the Company's business objectives" and devised a plan "intended to focus on realigning resources and investments in long-term growth opportunities."
The cuts aren't savage – Juniper exited 2022 with 10,901 staff after hiring 710 additional staffers during the year – but come after some underwhelming performance.
On its Q2 earnings call in late July, the networking multinational mentioned [PDF] "weakness" in orders from telcos, clouds, and service providers, and predicted that tepid demand would persist through the second half of calendar 2023. The Gin Palace highlighted the best-ever quarter for its enterprise business as a bright spot, noting it had become its largest segment and clocked up three quarters as its fastest growing vertical.
CFO Kenneth Bradley Miller attributed trouble at clouds and other large buyers to customers being too busy implementing past orders and widespread economic funk as together depressing demand and creating good reasons to postpone projects.
CEO Rami Rahim even rated AI as a short-term negative for Juniper – while the tech will likely grow network traffic, Juniper's cloud customers are still preparing for its impact. He added that most AI clusters use InfiniBand switches, rather than the Ethernet Juniper offers, but liked his chances of winning converts.
- Thousands of Juniper Junos firewalls still open to hijacks, exploit code available to all
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- Juniper's entry-level campus switches pack a lot of (literal) power
- Juniper drills into India’s oil industry, finds racks to fill
The Register understands Juniper staff – "Junivators" in corporate parlance – have known of looming cuts and/or re-orgs for weeks. We sought comment on the matter from Juniper in August but did not receive a reply.
As is always the case under such circumstances, morale was not brilliant among some Junivators.
Reports on job tracker The Layoff suggest jobs have gone in IT, engineering, and sales.
Juniper's share price started the day at $27.05 and ended at $26.47. The scrip topped $34 in April 2023, but has since trended downwards.
The networking outfit told investors that shedding staff will cost it around $59 million – $40 million of which will go in termination payments. Forty million bucks divided by 440 staff works out at $90,000 per staffer. Not all of that sum will be paid to individuals, but staff who were let go look to have decent parachutes.
The other $19 million cash will go on "other restructuring and related costs."
When it's all done, Juniper expects it will be better positioned "to prudently manage operating expenses in order to deliver improved operating margin."
All hail the deity of profit! ®