Seattle-based F5 Inc. (Nasdaq: FFIV) is laying off 623 employees, or about 9% of its total headcount.
The company announced the layoffs Wednesday and said it is also reducing its office footprint to cut costs. F5 will have more specifics on the office reduction in the coming quarter.
In a message to employees, CEO François Locoh-Donou said the company earlier this year took steps to adjust to the economic climate, including slowing its hiring, consolidating office space and minimizing travel, all of which gave F5 time to consider its economic outlook.
"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," Locoh-Donou said in the message. "Because of this uncertainty, we must take measures to decrease our costs without jeopardizing our future growth trajectory."
Locoh-Donou will not get a cash bonus this fiscal year, and the executive leadership team will have its cash bonuses reduced by 70%. Employee bonus funding is also being cut by 50%. Locoh-Donou said in the message large internal company events will be virtual, and there will be further travel and expense cuts. Laid-off employees will receive severance, job placement assistance and immigration support, among other benefits.
In a Wednesday filing with the Securities and Exchange Commission, F5 said it expects the layoffs to result in savings of about $130 million per year. F5 will incur about $45 million in severance and other benefits costs from the layoffs this fiscal year, but it can't predict the costs of its office footprint reduction yet.
"For F5ers who will be leaving us, I want to express my heartfelt appreciation for all you have done for our customers, partners and F5," Locoh-Donou said in his message. "To F5ers who are remaining with us, the following days and weeks will be difficult as we say goodbye to our friends and colleagues."
F5, founded in 1996, offers services like app security, fraud prevention, cloud services and automation technology. The company rebranded in November 2021 when it dropped "Networks" from its name. F5 started as a tool to help clients smoothly run their websites but has over time moved further into the app and cloud spaces. The company went public in 1999.
F5 laid off roughly 100 employees in October. At the time, the company had about 6,900 employees.
