US-based software company F5 has announced layoff of close to 9 per cent of its workforce or about 623 employees globally amid macroeconomic uncertainty.
"As we look at the past six months, it's clear that rising interest rates, geopolitical events, and macroeconomic uncertainty have dramatically affected our customers' spending patterns. We do not believe this environment will persist, but we also do not know what the new normal will look like when it comes," Francois Locoh-Donou, F5's president, CEO and director, wrote in a memo to F5 workers.
"Because of this uncertainty, we must take measures to decrease our costs without jeopardizing our future growth trajectory," he added.
Regions to be impacted
According to the company, the workforce reduction will affect employees from various regions, including the US, EMEA (Europe, the Middle East and Africa), Australia, Japan, New Zealand, Canada, Latin America, APCJ, and India.
Severance benefits
Moreover, the software firm said that it plans to spend $45 million on severance benefits and anticipates annual savings of $130 million from reducing its headcount.
Those affected will receive generous severance compensation, their Q2 FY23 MBO (Management by Objectives) payout and May 1 stock vest, outplacement assistance, retention of F5 laptops where possible, and immigration support.
In addition, the company will implement further reductions to travel and expense budgets and shift large internal company events to a virtual format.
Executive leadership takes cost cut in bonuses
F5's CEO also said that he will forgo his annual cash bonus for this fiscal year in addition to the executive leadership taking a 70 per cent cut in their bonuses.
Prior cost cuts and layoffs
This move comes after the company had already taken steps to reduce expenses earlier this year. The steps include slowing hiring, minimizing travel and reducing office space. The company also had a round of layoffs earlier in October 2022.
The company earlier this week reported a 11 per cent revenue growth to $703 million for its fiscal second quarter, with Non-GAAP income increased to $154 million from $131 million for the same period in the last year.
With input from IANS
