F5 Networks is laying off about 230 people or about 5 percent of its staff, and plans to close an office in Massachusetts, the technology company confirmed as part of its Q3 2018 earnings report this week.
Although F5 Networks is growing, new CEO François Locoh-Donou wants to scale back some legacy businesses and double down on growth opportunities like cloud and security solutions. To drive the effort, the firm has promoted Chad Whalen to executive VP of worldwide sales -- essentially naming him the company's global channel chief.
F5 Networks: CEO Shares Vision, Direction
During an earnings call this week, Locoh-Donou said:
"We are very focused on the transformation of F5 into a multi-cloud application services leader, and as a result, there is legacy spend that we have that is less relevant for the future than it has been for the past, and we are shifting our focus to the growth areas of F5. Specifically, we are intensifying our investments into software and multi-cloud technologies, in new go-to-market motions, and also in building the necessary digital infrastructure that enables those go-to-market motions. And so today's restructuring is really not about cost-cutting. It really is about realignment of resources towards these areas and accelerating the execution of our strategy."
As a result, the company expects to take a restructuring charge in the range of $23 million to $25 million in Q4. That charge is already reflected in the company's GAAP expense estimates. F5 doesn't expect the restructuring to impact the company's so-called " Horizon 1 or Horizon 2" financial guidance, which surfaced during a March meeting with Wall Street analysts.
Amid the staff changes, the company continues to grow. Revenue was $542.2 million in Q3 2018, up 4.7 percent from $517.8 million in Q3 2017. Also, net income was $122.7 million, up from $97.7 million in Q3 2017.
F5 Networks: New Channel Chief Chad Whalen
Meanwhile, Chad Whalen shifts from the company's worldwide sales team to his new position -- executive VP, worldwide sales. In his new position, Whalen oversees the company’s sales and channel strategy. He previously was VP of global alliances and cloudsServices at Fortinet.
Overall, F5 is expanding into multi-cloud application services and protection. The updated channel push is expected to include two new dedicated security products–F5 SSL Orchestrator and F5 Access Manager. Those offerings give security professionals "advanced resources to help thwart today’s most sophisticated cyber-attacks," the company asserts.