Akamai is feeling the pinch of the malaise affecting the IT sector, announcing lowered predictions for the current financial quarter and substantial staff layoffs.
The company plans to lay off 200 people worldwide – about 14 per cent of its workforce. This is in response to its revised first-quarter revenue projection – the company expects to gain revenues of $40 million, rather than the $45 million it originally expected. This will mean a first quarter loss for the company in the region of $37 million before tax.
Revenue for the year 2001 is expected to reach $175 million, not the $245 million originally expected. This means Akamai, in which Apple holds a substantial investment, will lose approximately $115 million in this financial year.
"We have put our start-up losses and significant up-front capital expenditures behind us, our cash burn rate has decreased and we expect it to continue to decline throughout the year," chairman and CEO George Conrades said. He added: "In addition, we have tight cost controls in place, and are achieving absolute cost savings through automation and outsourcing."
The company will announce its earnings on April 18. It's clients include Apple, CNN, CNBC and Reuters.