Akamai Cuts 7% of Staff

Written by Ryan Lawler

Wednesday, November 19. 2008 at 06:30 PM EST Post a comment

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Despite solid growth in its third quarter, Akamai Technologies Inc. (Nasdaq: AKAM) announced that it is cutting 110 employees, or approximately 7 percent of its staff, in a corporate restructuring.

The company will take a $4 million charge in the fourth quarter for severance and related expenses. The company says that charge will be partially offset by an $800,000 reduction in non-cash, stock-based compensation, reflecting a modification to certain stock-based awards granted to affected employees.

Jeff Young, Akamai's director of corporate communications, says that the cuts will happen "across multiple functional areas and geographies in our global workforce."

Akamai is making the cuts despite solid third-quarter earnings just a few weeks ago, and despite having more than $800 million in cash on hand. The company also says it has not changed its business outlook for the fourth quarter, which was slightly lower than analyst expectations. Nevertheless, the company says the cuts will allow it to continue investing in its business.

"This reduction in force, in addition to other cost-saving measures we are making, will continue to allow us to reach our business goals. We will continue to focus on investing for growth in key areas such as content delivery, application acceleration, and our new advertising solutions," Young says.