F5 Networks Laying Off 230 In Continued Cloud Push

F5 Networks is laying off about 230 people and closing a Massachusetts facility as part of its ongoing transition to a multi-cloud application-based strategy.

The Seattle, Wash., company announced its latest restructuring effort in an regulatory filing related to its third-quarter earnings. The company continues to hire in certain focus areas, but the cuts are necessary as part of a shift F5 – a legacy load-balancing stalwart – is making toward the cloud, CEO Francois Locoh-Donou said, according to a transcript of the company's third-quarter earnings conference call.

"We are very focused on the transition of F5 as a multi-cloud application leader," Locoh-Donou said, according to the call transcript. "As a result, there is some legacy spend that is less important to the future."

F5 is "accelerating our hiring to support our multi-cloud application services strategy, with over 300 open positions worldwide… new go-to-market motions, multi-cloud software development and digital transformation initiatives," a company spokesman said in a statement.

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The cuts are happening in IT, services, product development, sales support and marketing. The company said the move would likely cost as much as $25 million, mostly in severance. As part of the restructuring, the firm is also shuttering a Lowell, Mass., office to cut down on leased office space. F5 cut an undisclosed number of people last September and employs about 4,500 people worldwide.

F5 has in the last year made an aggressive push into the public cloud, signing a partnership agreement with Amazon Web Services and being selected to take join AWS Marketplace's Channel Opportunity Registration Program. The company has also launched subscription incentives for partners, as well as free channel training programs centered on application services and automation.

F5 also announced that it has made Chad Whalen executive vice president of worldwide sales. The role is a promotion from Whalen's previous position as head of F5's global cloud sales team. Whalen has been with F5 since early 2017. He'll oversee the company's sales and channel strategy in his new role, and takes over for industry veteran John DiLullo, who left the company after a three-year stint.

F5 reported third-quarter sales of $542 million, a nearly 5 percent improvement over the same period a year ago. Profit for the quarter was slightly less than $123 million, up from about $98 million a year ago.