Akamai Technologies Inc is to lay off 29% of its workforce, 145 people, and is looking for a new CFO, alongside predictions of continued lower revenue.
The company reported a net loss for the third quarter, and said it is restructuring to achieve profitability, which has eluded it since it was founded. The Cambridge, Massachusetts firm, which offers content delivery network services, also predicted lower revenue in the current fourth quarter.
Akamai reported a net loss of $47.5m, compared to a net loss of $42.2m in the second quarter and $55.4m a year ago, on revenue that sank 2% sequentially and 17% on the year to $35.4m. Normalized loss per share was $0.28, in line with the First Call analysts’ consensus estimate.
The layoffs will require Akamai to focus its efforts on its most productive enterprise opportunities, namely global enterprises, government and only the top web properties. Product-wise, the company will focus on selling EdgeSuite, its complete site delivery service, and Edge Computing.
The speed of EdgeSuite adoption is increasing. The service currently has 243 customers, up 32 on the quarter, and accounts for 39% of Akamai’s revenue, compared to 36% in the second quarter and 27% in the first quarter.
Akamai will end 2002 with 550 employees, down from 1,115 this time last year. The company laid off 14% of its workforce in April last year, and 275 people in October 2001. The company is also looking for a replacement for CFO Timothy Weller, who has announced he will resign for undisclosed reasons by the end of the year.
For the fourth quarter, the company expects revenue to be down further, to between $32m and $35m. It expects to make capital expenditures of just $2m to $3m in the fourth quarter, compared to $7m in the third.
Despite the grim outlook, the company has plenty of cash to play with, and maintains its business plan is fully funded. Akamai ended the quarter with $142m in cash and securities, down $18m on the quarter, and expects to end the year with between $110m and $120m ready money.