Juniper Networks, the US-based telecom gear maker, has announced plans to eliminate more than 400 jobs across its global locations.
This move will result in an estimated cost of $59 million, with the majority allocated to severance and termination expenses, accounting for $40 million.
Juniper Networks disclosed in a recent filing with the US Securities and Exchange Commission (SEC) that it anticipates incurring additional restructuring and related expenses totaling around $19 million.
What the SEC Filing Reveals About the Job Cuts
According to Juniper, this initiative stems from a comprehensive review of the company's business objectives, with the intention of reallocating resources and investments toward long-term growth opportunities.
The company believes that this plan will enable it to prudently manage operating expenses and ultimately enhance its operating margin.
While Juniper Networks expects the majority of the layoffs to be completed by the end of the first quarter of fiscal 2024 in March, it cautions that specific job eliminations may be subject to local legal requirements and consultation procedures, potentially extending the workforce reduction process beyond that date in certain countries.
Job Cuts as Part of a Broader Restructuring Plan
These job cuts are part of a restructuring plan previously announced by Juniper earlier this year.
Despite reporting $1.43 billion in revenue for the second quarter, a 13% year-over-year increase and 4% sequential growth, the company faced challenges in its cloud business, which declined by 6% year-over-year. In contrast, its service provider business experienced marginal growth of 1% year-over-year.
During the second-quarter earnings call, Juniper's CEO, Rami Rahim, highlighted the strong performance of the enterprise business, which accounted for over 45% of total revenue.
He also noted that challenges related to customer deployments, particularly among larger cloud customers, created uncertainties in revenue projections.
Consequently, Juniper revised its full-year revenue growth forecast while maintaining its commitment to improving profitability and operating margins in 2023.