Global communications firm, Viasat, has announced a significant reduction in its workforce due to the integration of its recently acquired business, Inmarsat. The company is set to lay off around 800 employees, or approximately 10% of its workforce, as it seeks to focus spending on growth opportunities and expand margins and profitability.
Viasat's President, Guru Gowrappan, acknowledged the difficulty of this decision. He emphasized that the layoffs align with the company's strategy for long-term success. These layoffs will impact various divisions and regions within Viasat but will predominantly maintain operations in the US and UK.
The layoffs are expected to cost Viasat $45 million, largely incurred in the latter half of fiscal year 2024. However, they are projected to save the company $100 million annually starting from fiscal year 2025.
In addition to these changes, Viasat is finalizing insurance claims related to power subsystem anomalies for two of its satellites, ViaSat-3 and Inmarsat-6 F2. The company aims to achieve a capex target of $1.4 billion to $1.5 billion by 2025.
The news was reported by Satellite Today, which also highlighted Viasat's commitment to acknowledging the dedication of departing colleagues during this challenging period.
InvestingPro Insights
Despite the recent layoffs, Viasat's financial health appears to be on an upward trajectory, as evidenced by InvestingPro data. The company's market cap is currently $2460 million, and its revenue growth over the last twelve months as of Q1 2024 stands at 14.02%. Moreover, the company's quarterly revenue growth for Q1 2024 was a robust 35.6%.
InvestingPro Tips also provide some valuable insights. Viasat's revenue growth has been accelerating, and net income is expected to grow this year. Additionally, analysts anticipate sales growth in the current year, and two analysts have revised their earnings upwards for the upcoming period. These points indicate a positive outlook for the company's financial performance.
Viasat is also trading at a low Price / Book multiple of 0.42 as of Q1 2024, which could make it an attractive investment opportunity. However, it's worth noting that the company has been quickly burning through cash and operates with a significant debt burden.
Overall, these insights suggest that while Viasat faces some challenges, its financial outlook remains positive. For more comprehensive and personalized investing advice, consider exploring the additional tips available on InvestingPro.
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