Business VoIP

In a move that reportedly has analysts slashing sales estimates, a Cambridge, Massachusetts-based company that created a digital operating environment for the Web announced this week that it’s laying off 110 workers.

 

Officials at Akamai Technologies Inc. say the figure marks about 7 percent of their international workforce.

 

According to J.D. Sherman, Akamai’s (News - Alert) chief financial officer, the company hasn’t changed its business outlook.

 

“However, we want to ensure that we can keep investing for growth even in the current economic climate,” Sherman said.

 

Yet, according to a report today from CNBC.com, analysts are skeptical of Akamai’s move.

 

Citi Investment research analyst Mark Mahaney reportedly called the job cuts “particularly ominous” for the technology sector “and said the move raises a number of questions, including when the layoffs will happen and how much the company expects to save,” CNBC.com reports.

 

Akamai’s shares fell 50 cents, or 4.8 percent, to $10.12 in morning trading today.

 

Oppenheimer & Co. analyst Srinivas Anantha reportedly said the job cuts were likely driven by slower revenue growth, a result of weakening sales volume and price declines.

 

Though the technology sector has seen a harrowing past two weeks – with news of job cuts and reduced financial projections coming from Sun Microsystems, Intel Corporation and Sonus Networks – the VoIP industry got a shot in the arm recently when one telecom expert said IP telephony stands to gain traction under the administration of President-elect Barack Obama.

 

Under President-elect Barack Obama’s administration, the VoIP market stands to gain a greater appreciation from the federal agency that regulates communications in the United States, Washington, D.C.-based attorney Andrew D. Lipman of Bingham McCutchen LLP told TMCnet during an interview. VoIP also stands to get better carrier interconnection rights and recognition among policy-makers that the telecommunications world is evolving toward Internet telephony, Lipman said.

 

Of course, for the time being, such predictions aren’t doing much good for Akamai.

 

The company said that, as a result of its job cuts and other restructuring moves, it expects to spend about $4 million on 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,” Akamai officials say.