Akamai, the Cambridge Massachusetts content material supply community and community companies supplier, introduced they’d laid off 400 individuals in their earnings name with analysts yesterday.
On the decision, Akamai CEO Tom Leighton indicated that the 400 individuals represented 5 p.c of the corporate’s 8000 worldwide workforce. “As a part of our effort to enhance operational effectivity, we lowered headcounts in focused areas of the enterprise, most notably in areas tied to our Media enterprise. Total, now we have eliminated about 400 positions or 5% of our international workforce,” Leighton informed analysts.
He went onto to say that the layoffs really started on the finish of final 12 months and have spilled over into this week. The corporate sees this as a part of an effort to get leaner and minimize prices, an effort that predates Elliott Administration shopping for a 6.5 p.c stake within the firm in December.
Elliott has a historical past of being an activist investor and a fame for pushing corporations to make huge adjustments. On this case although, it seems the corporate was looking for methods to cut back prices even earlier than Elliott entered the image.
An organization spokesperson added, “The discount in workforce is one a part of a collection of choices to cut back value as we proceed to spend money on areas to place Akamai for long-term success.”
This can be a level that Leighton additionally made as he tried to mood the layoffs with information that the corporate plans to spend money on different areas “It’s vital to notice that whereas we’ve made reductions in some areas of the enterprise, we’re additionally investing in areas that may return better worth going ahead,” he stated. These embody areas like safety and Web of Issues, markets which might be nonetheless creating and there’s room to take advantage of.
The corporate really had an honest quarter, beating analysts expectations with income rising eight% to $663 million. The corporate inventory is up $four.65 this morning or 7.30 p.c, as of this writing.
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