Akamai just reported Q4-2017 revenue of $663M and 2017 revenue of $2.5B. The Cloud Security Solutions division, which is the fastest growing line within Akamai, reported revenue of $482M for 2017. The biggest surprise – Akamai recorded a $52M restructuring charge in Q4 and laid off 400 employees. Akamai isn’t done restructuring, in that they plan to record another $15M in Q1-2018, which likely means more pink slips.
Supposedly, the layoffs began in Q4-2017 before Elliott Management acquired a 6.5% stake in Akamai. So is Elliott Management to blame for the layoffs? We’ll never really know, but we do know that activist hedge funds are not in the business of acquiring stakes in companies and then going on a hiring spree. Akamai goes on to say that those affected by the layoffs include R&D engineers that were working on new projects in the media division, but for whatever reason those projects didn’t pan out. However, Akamai plans to invest in other high growth product lines such as security.
Layoffs are always devastating. On the bright side, a large pool of highly technical talent, including R&D engineers just hit the market. We’re sure that companies like AWS, GCP, Azure, CDNs and other startups will scoop up many. This leads to the bigger question, is Akamai getting ready to sell itself? I wouldn’t bet against Elliott Management. One thing is for sure, if you’re at Akamai, start sharpening the pencil and getting the resume ready.