Networking, Networking

Infoblox Layoffs 2016: 110 Staff Cuts, 12% Employee Reduction

Jasper Andersen
Jasper Andersen

Infoblox Inc., which promotes security solutions to MSPs, has confirmed layoffs -- including roughly 110 staff cuts representing a 12 percent employee headcount reduction. The cuts come amid weaker-than-expected revenues, rumored takeover bids and potential shareholder activist battles.

The Infoblox cuts will mainly involving sales and marketing layoffs, with additional cuts in research and development, and general and administrative functions, according to an SEC filing. In a press release, Infoblox insisted that the cuts will make the company more efficient and better positioned for long-term growth.

Infoblox Revenues, Shareholder Stress, Takeover Rumors

However, Infoblox's recent financial performance is cause for concern. In an early May statement, Infobox cut its Q3 revenue expectations by about $10 million. When official results arrive in late May, CEO Jesper Andersen pointed to a "weaker than expected spending environment combined with a more rapid tapering down of our product upgrade cycle than we anticipated."

In early June, Bloomberg reported that Infoblox hired Morgan Stanley to defend itself against shareholder Starboard Value, which has a 7 percent stake in the technology company. There were also rumors that private equity firm Thoma Bravo had bid for Infoblox.

Amid those variables, Infoblox is cutting costs to boost profitability. Most of the $6.5 million restructuring plan will be completed in Q4, though some actions won't wrap up until Q1 fiscal 2017, the company said.

Infoblox Channel Partners, MSPs?

Following the sales and marketing headcount cuts, it's unclear if or how Infoblox will lean more on channel partners. During a late May earnings call with Wall Street analysts, CEO Andersen barely mentioned partners -- though he does see some ecosystem opportunities ahead.

"Given our critical position in the network, which provides unique visibility, context and control point we are committed to providing actionable network intelligence that we can extend to our ecosystem partners and to the cloud," he said at the time. "We are delivering our products physically, virtually and as a service."

No doubt, MSPs are critical to that effort. But for the moment, the company has declined further comment about today's cuts and reorganization.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.