Akamai to Take Cost Cutting Measures to Support Continued Investment in Key Areas
Akamai Technologies, Inc. (NASDAQ: AKAM), the leader in powering rich media, dynamic transactions and enterprise applications online, announced today that it will take a restructuring action in the fourth quarter to reduce certain operating costs. The Company expects to use the ongoing savings generated by this action and its continuing cash from operations to support investments in key growth opportunities for content delivery, application acceleration, and its advertising industry solutions, as well as for further international expansion.
"We have not changed our business outlook," said JD Sherman, CFO of Akamai. "However, we want to ensure that we can keep investing for growth even in the current economic climate."
As a result of these cost cutting measures, Akamai expects to take a restructuring charge of approximately $4 million this quarter for severance and related expenses. These costs are anticipated to be partially offset by a net reduction in non-cash stock-based compensation of $0.8 million, reflecting a modification to certain stock-based awards previously granted to the affected employees. Approximately 110 employees, or 7 percent of Akamai’s worldwide employee population, will be affected. Additionally, the Company expects to recognize a loss on sublease income of approximately $2.5 million related to certain leased facilities.
The Akamai Difference
Akamai® provides market-leading managed services for powering rich media, dynamic transactions, and enterprise applications online. Having pioneered the content delivery market one decade ago, Akamai's services have been adopted by the world's most recognized brands across diverse industries. The alternative to centralized Web infrastructure, Akamai's global network of tens of thousands of distributed servers provides the scale, reliability, insight and performance for businesses to succeed online. Akamai has transformed the Internet into a more viable place to inform, entertain, advertise, interact, and collaborate. To experience The Akamai Difference, visit www.akamai.com.
Akamai Statement Under the Private Securities Litigation Reform Act ,
This release contains information about future expectations, plans and prospects of Akamai's management that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, including statements concerning the expected growth and development of our business. These statements are subject to risks and uncertainties and are based on the beliefs and assumptions of the Akamai's management as of the date hereof based on information currently available to the company’s management. Use of words such as "expects" and "anticipates" or similar expressions indicate a forward-looking statement and include those statements regarding the restructuring charges and costs in the fourth quarter of 2008, management’s outlook on the business and the charges attributable to severance and other personnel-related expenses. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions. Actual results may differ materially from the forward-looking statements Akamai makes. See the company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, including the information set forth therein under the caption "Risk Factors," for a discussion of certain risks associated with its business. Akamai disclaims any obligation to update forward-looking statements as a result of new information, future events or otherwise.