Update: Juniper did confirm layoffs (see update below).
According to Forbes story last week by Eric Savitz titled Juniper: Will Slowing Business Trigger Big Layoffs? Juniper is going to layoff a portion of its staff.
Forbes quoted UBS analyst Nikos Theodosopoulos, who raised that possibility in a research note Tuesday morning. He chopped his price target on the stock to $24, from $31 citing slow macro growth.
“Following further industry checks, we believe Juniper may be planning a deeper workforce reduction than we previously anticipated, perhaps ~10% of its total headcount of around 9,300″ as of the end of the June quarter, he writes. “To us the potential workforce reduction signals a greater focus on maintaining profitability, but also the risk of lower near-term company growth.”
Juniper responded that he was wrong, citing a turnaround plan, but not denying the 300 person layoff. David Shane, formerly of HP during the Mark Hurd regime and recently moving to Juniper last year, comments to the Forbes story:
“Juniper consistently works to best align our people and resources against the growth opportunities on which we are focused,” David Shane, VP of Global Corporate Communications, said in a statement. “That work is ongoing, but rumors today of a 10% reduction to our workforce are grossly overstated and inaccurate.”
The layoff number of 300 that I confirmed was only from one group within Juniper. There could be more but couldn’t confirm that yet. The original 10% layoff figure seems high to me. Juniper has been cutting back expenses for over year, and there could be more layoffs if Juniper can’t get back in the right direction. Certainly the Juniper stock is moving in the wrong direction – see chart.
Juniper is in trouble and so is Cisco. Cisco has publicly said it is accelerating its restructuring plans. Juniper seems to be on the same path, but doing it quietly.
Both Cisco and Juniper’s core businesses are under attack from the cloud and software models as well as new startups. Except new entrants and new approaches like OpenFlow to be a key part in disrupting the new networking landscape. Juniper has had a software focus with Junos, but the developer uptake on Junos isn’t getting the traction that Juniper hoped.
UPDATE: Juniper officially responded to my post about the layoffs. They did not want to confirm the actual number of 300, but did seem to confirm sizable layoffs. Juniper’s positioning is that they are reorganizing and actually adding employees.
Here is their official response
According to Juniper spokesperson David Shane:
“Juniper consistently works to best align our people and resources against the growth opportunities on which we are focused. While we are eliminating a small number of positions, the company plans to end the year with a net increase in our global workforce.”