F5 Networks laid off a number of people across the company this week, GeekWire has learned, after two straight disappointing financial quarters hit the Seattle-based application delivery and network security company.
A F5 representative confirmed the cuts in a statement: “As part of F5’s annual strategic business review we evaluate our organizational structure and priorities. This is to align resources around our strategy for growth and to ensure we have the right teams in the right places where we are increasing our investments, especially in cloud and security.”
It’s not clear exactly how many people were affected, but sources told GeekWire the cuts came across departments as F5 apparently decided to cut costs after missing expectations for revenue last month in the midst of a product refresh. The company had 4,395 employees as of May, according to the Forbes Global 2000 list.
In July, F5 CEO Francois Locoh-Donou said that the company was seeing a slowdown in sales to European customers amid concerns about data protection laws and the uncertainty that brings to strategic infrastructure decisions. Like many tech companies of a certain age, F5 is also in the middle of adapting its business to the modern cloud computing era, moving away from hardware and attempting to blend subscription software services into its product lineup.
Progress has been mixed: the company missed revenue targets by a significant margin in its last quarter, and came in below expectations in its second fiscal quarter, which ended in March. Revenue has been essentially flat at F5 over the last year, and the stock price has followed suit. Earlier this year it signed a 15-year $359.5 million lease to occupy the F5 Tower in downtown Seattle, which was expected to be finished right around now.
Locoh-Donou became CEO in April after a few tumultuous years in the CEO office, with the retirement of John McAdam, the sudden resignation of Manny Rivelo, and the temporary return of McAdam in 2016. Locoh-Donou told GeekWire last month that F5 will return to growth as companies rebuild legacy applications for the hybrid cloud era.