Fastly (FSLY.US) announced a restructuring plan: cutting 11% of its workforce to cope with the challenges.
Fastly, a content delivery network services provider, recently announced a restructuring plan that includes cutting about 11% of its global full-time employees. As part of the strategic shift, Fastly expects to incur approximately $9.5 million to $10 million in costs in the third quarter of 2024, which includes severance, employee benefits, and other cash payments related to the layoffs.
According to the company's filings, Fastly expects to complete the layoffs and related cash payments before the end of the fiscal year, or by December 31. Fastly's stock fell more than 14% on Thursday after the company lowered its full-year guidance by 5% earlier this week.
So far this year, Fastly's stock has fallen nearly 67%.
Fastly's second-quarter earnings showed revenue growth, from $122.8 million to $132.4 million. However, the company reported a net loss of $43.7 million, or a loss of $0.32 per share, up from a loss of $10.7 million, or a loss of $0.08 per share, in the same period last year. Adjusted earnings per share came in at 7 cents, slightly below the analyst estimate of 8 cents, according to FactSet.
Todd Nightingale, Fastly's chief executive, said, "We are facing some challenges with our largest customers, so we are taking steps to adjust our cost structure." He added, "This change will allow us to focus on the edge cloud innovation and the ongoing market shift."