Juniper Cuts Jobs, Says Marketing Funds Are Next
Juniper Networks is laying off 6 percent of its global workforce, or roughly 550 employees, as part of the broader restructuring and cost-cutting initiative being driven by new CEO Shaygan Kheradpir.
Juniper announced the job cuts in a filing with the U.S. Securities and Exchange Commission (SEC) this week, saying the cuts would take place immediately, with the bulk of them targeting "middle management" positions.
In addition to the layoffs, Juniper said it will stop developing the application delivery controller (ADC) technology it licensed from Riverbed in July 2012. Juniper said no revenue was being generating from its ADC line.
[Related: New Juniper CEO Lays Out Restructuring, Cost-Cutting Plan ]
Further restructuring and cost-cutting efforts will take place in the second quarter, Juniper said, including marketing program reductions.
Juniper could not confirm by press time whether these marketing cuts would specifically impact the channel, but told CRN in an email statement that the company "remains 100 percent committed to our partner strategy and will be doubling down with our partners worldwide with additional people, resources, and investments."
A sales executive from one Juniper Elite-level partner, however, said he fears that partner marketing dollars may be cut, especially given the inconsistencies he has seen recently in Juniper's MDF program.
"I am concerned that [Juniper] is saying marketing is going to be cut. I'm sure that they are going to [target] the MDF dollars that we get, that the channel gets, just because they are so inconsistent," the partner, who asked not to be named, told CRN. "A lot of companies just say 'you give us this revenue, we'll give you this percentage in marketing dollars.' But with Juniper, it's always based on how the quarter is going. We can get $5,000 one quarter and $10,000 the next. It just really seems to fluctuate."
The partner did, however, welcome Juniper's decision to nix its ADC technology, and said he would support further cuts around Juniper's wireless and security portfolios.
"I think, quite frankly, that they can go after a few other products that we personally don’t sell very often, and we don’t hear anyone selling," the partner said.
The cuts are part of Juniper's new "integrated operating plan" (IOP) introduced in February, just a month after Kheradpir, a former Verizon Communications and Barclays executive, joined Juniper as its new CEO. IOP, Kheradpir said in February, is aimed at saving Juniper $160 million by the first quarter of 2015, and refocusing the company's efforts around cloud and what Kheradpir calls "highly intelligent" network technologies.
The plan was launched in response to mounting pressure from Juniper investors such as Elliott Management, which in January filed a report with the SEC, urging the company to reduce operating expenses, reevaluate its product portfolio and scale back on R&D spend.
Juniper said in the filing that it also plans to consolidate its facilities, starting in the second quarter. The company said it will shed about 300,000 square feet of leased facilities space, or about 12 percent of its global facilities footprint.
Juniper said it expects to take a facilities restructuring charge of approximately $70 million in the second, along with a $35 million charge for the layoffs in the first quarter.