Just weeks after its initial public offering, web infrastructure company Loudcloud announced that it will layoff 122 employees, or 19 per cent of its staff, as it aims to cut back on expenses.
The layoffs leave Loudcloud with 507 employees. The reduction is also designed to "reach cash flow breakeven with its existing cash and available resources", the company said, adding that it is also cutting costs in other areas.
Chief executive Ben Horowitz said: "The initiatives that we are announcing today are part of our ongoing efforts so that we prudently manage our cash expenditures. We are confident that we can maintain our superior levels of quality and customer service with our planned staffing levels."
Loudcloud, started by Netscape co-founder Marc Andreessen in 1999, has been closely observed as a leading indicator of how well capital-intensive infrastructure companies can survive in the market.
The company raised $150m in an initial stock sale in March. Loudcloud posted a net loss of $234m for the fiscal year ended 31 March, with revenue growth up 94 per cent in the fourth quarter to $8.9m from the previous quarter. Shares closed at $6.43, up about nine per cent.
A Loudcloud spokesman said there were no specifics available at this time as to where the layoffs will occur. The company manages its infrastructure network by way of a worldwide network of data and network operations centres in North America and Europe.
Loudcloud also said it named new management changes that include Shellye Archambeau as chief marketing officer, and John O'Farrell as executive vice president of business development.
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