April 2 Network gear maker Juniper Networks Inc , which is under pressure from investor Elliott Management Corp to slim down, said it plans to reduce its global workforce by 6 percent and focus on its high-growth businesses.
Juniper said most of the cuts would impact middle management positions and that it expected to incur cash charges of about $35 million in the first quarter, related to severance and other expenses. (link.reuters.com/hyr28v)
The company had 9,483 full-time employees as of Dec. 31.
Juniper also said it would stop development of the application delivery controller technology, which helps remove excess load from servers, resulting in a non-cash intangible asset impairment charge of about $85 million.
The company said it plans to consolidate its facilities, disposing of about 300,000 square feet of leased facilities, and record restructuring charges of about $70 million beginning in the second quarter.
Juniper added that it expected to record other non-cash asset write-downs of about $10 million in the first quarter and that it expects to carry out more restructuring in the second quarter.
Hedge fund Elliott said in January the stock was "undervalued" and could be worth $35-$40 if Juniper focused on revamping its core business of making routers and switches for mobile carriers such as Verizon Communications Inc and AT&T Inc.
The company said in February it expected to initiate a substantial cost reduction plan resulting in annualized operating expense savings of $160 million. (r.reuters.com/nyr28v)
Shares of Juniper closed at $26.35 on the New York Stock Exchange on Wednesday. (Reporting By Sampad Patnaik in Bangalore; Editing by Don Sebastian)