Posted by : Randy Cooper in (CDN)
The CDN (content delivery network) market might not be as downturn-proof as analysts at first thought, following the news that one of its lead players is going slim its workforce in response to the global financial crisis.
Akamai Technologies, plans to cut 7 per cent of its staff says its CFO, JD Sherman, eliminating 110 positions. The company says this will free up cash for continued investment should credit markets dry up further – an aggressive posture considering the company has $800 million cash on hand. “We have not changed our business outlook,” said Sherman. “We want to ensure that we can keep investing for growth even in the current economic climate.”
The move is the first real indication CDN and hosted services operators could be vulnerable to the worldwide downturn. Akamai and its peers generally posted strong 3Q growth, leading analysts to suggest the segment could be immune to broader telecom woes.