Cloud and security services firm F5 Inc said it was reducing its workforce by 9 percent and cutting bonuses of senior executives to bring down costs.
F5’s downsizing plan, which will affect 623 employees due to job cuts, also includes cutting back spending on office space and executive travel.
F5 CEO François Locoh-Donou said: “Given the current demand environment however, we are taking action to reduce our operating costs while prioritizing initiatives and innovations that will deliver the most benefit to our customers.”
F5 estimates that headcount reductions will result in annualized savings of $130 million. F5 expects it will incur approximately $45 million in severance benefits costs and other charges related to these actions in fiscal year 2023.
Additionally, F5 will reduce eliminate portions of its facilities footprint, as well as reduce costs by applying additional scrutiny on discretionary projects, further reducing travel, and substantially reducing the size of its corporate bonus pool in 2023.
The Seattle, Washington-based company also lowered its fiscal 2023 revenue growth forecast to “low-to-mid single-digit” from an earlier forecast of 9 percent to 11 percent growth.
For the third quarter of fiscal year 2023, F5 expects to deliver revenue in the range of $690 million to $710 million.
Second quarter fiscal year 2023 revenue grew 11 percent from the year ago period, to $703 million, up from $634 million in fiscal year 2022. Global services revenue grew 8 percent from the year-ago period while product revenue grew 14 percent, reflecting 43 percent systems revenue growth and software revenue that was down 13 percent from the year-ago period.
F5 said net income for the second quarter of fiscal year 2023 was $81 million, or $1.34 per diluted share compared to $56 million, or $0.92 per diluted share, in the second quarter of fiscal year 2022.