Akamai cuts five per cent of global workforce
- 07 February, 2018 10:22
Akamai Technologies’ profit and revenue topped estimates on 6 February, as an aggressive push into cloud security helped to offset a decline in its traditional business of speeding up content delivery through the web.
The content delivery network and cloud services provider’s shares were up nearly 10 per cent at US$69 in after-hours trading.
However, the company has cut about five per cent of its global workforce, CEO Tom Leighton said during a call with analysts.
Akamai, in which activist hedge fund Elliott Management Corp revealed a 6.5 per cent stake, said it had recorded a US$52 million charge related to the job cuts, along with facility closures, largely in the media division.
Revenue from the company's cloud security solutions surged over 32 per cent to US$135.2 million in the fourth quarter ended 31 December, while it declined three per cent to US$284 million in its media division.
The company's total revenue rose 7.7 per cent to US$663.5 million, beating analysts' average estimate of US$649.1 million.
However, the company's net income plunged to US$19.1 million, or 11 cents per share, from US$91.6 million, or 52 cents per share, a year earlier, due to certain charges.
The company also said it recorded a US$26 million provisional charge associated with the recent US tax changes.
Excluding items, the company earned 69 cents per share, above analysts' average estimates of 63 cents.
Elliott in December pushed the company to look for strategic options.
(Reporting by Sonam Rai and Arjun Panchadar in Bengaluru; Editing by Sriraj Kalluvila)