Enterprise networking vendor Juniper Networks has hinted at a job rationalization after it reported 5 percent drop in Q3 2014 revenues to $1,126 million.
Juniper Networks was impacted lower-than-expected demand and slower ramp-up of new projects from service providers, particularly in the U.S. This apart, Web 2.0 Switching revenue was lower than anticipated due to the timing of deployments and the slower ramp of new projects.
The company generated product revenue of $810 million, down 10 percent, while services revenue was $316 million, up 11 percent.
Juniper Networks announced additional cost reductions of approximately $100 million, and hiked its annualized commitment to $260 million, to lower operating expenses while improving profitability and long-term growth.
“This initiative will improve Juniper’s cost structure and continue earnings growth as the company navigates through current market conditions. Key components to the cost reductions include a careful management of headcount, focus on improved efficiencies and prioritization of revenue-generating projects,” said Shaygan Kheradpir, chief executive officer of Juniper Networks.
Juniper Networks headcount at the end of the quarter was 9,059, which includes approximately 200 employees who transitioned as a result of the sale of the Junos Pulse business. Adjusting for the exiting Pulse employees, Juniper Networks headcount declined 7 percent versus Q4 of 2013.
Juniper Networks said its Americas revenue rose 3 percent. Americas Service Provider revenue increased 1 percent. The increase was driven primarily by Web 2.0 and cable provider growth, partially offset by decline from carrier demand. Americas Enterprise revenue rose 5 percent.
EMEA revenue dipped 5 percent due to declines in Western Europe and the Middle East, primarily in Service Providers.
APAC revenue declined 28 percent, primarily due to Service Provider weakness in China and Japan.
Juniper Networks Service Provider revenue decreased 6 percent to $742 million due to EMEA and APAC and U.S. carriers, partially offset by a slight increase in the Americas from Web 2.0 and cable providers.
Enterprise revenue dropped 3 percent to $384 million.
Juniper Networks said Routing product revenue decreased 12 percent to $533 million, driven by weakness in the carrier market in both core and edge.
Switching product revenue increased 5 percent to $155 million, driven by QFX into service providers, partially offset by a decline in the EX, mainly in the broad enterprise market.
Juniper Networks Security product revenue fell 16 percent to $121 million.
Rajani Baburajan
editor@infotechlead.com
