Viasat to cut 800 jobs in strategic move following Inmarsat acquisition
In a strategic move aimed at improving profitability, international satellite communications company Viasat Inc. has announced plans to cut 800 jobs, representing a 10% reduction in its workforce. This decision is part of Viasat's ongoing integration with Inmarsat, which it acquired on May 31, and is expected to save the company approximately $100 million annually from fiscal year 2025 onward. The layoffs will span multiple divisions and regions, while maintaining Viasat's significant presence in the U.S. and U.K.
The job cuts form part of Viasat's strategy to focus its investments in areas with high growth potential, thereby ensuring its long-term success. The company expects to incur charges of $45 million primarily in the second half of 2024 due to these layoffs, contributing to its CapEx target of $1.4 billion to $1.5 billion for the same year.
Despite a significant drop in Viasat's stock over the past three months, with a plunge of 40.2%, the announcement was followed by a premarket rise of over 1%. This uptick contrasts with a recent 6.1% decrease in the S&P 500 SPX index.
Despite a reduction in the ViaSat-3 satellite's planned capacity and a power subsystem anomaly with Inmarsat-6 F2, Viasat will not order additional satellites. The company trusts in its current fleet to meet customer commitments. It is also finalizing insurance claims for both affected satellites, which are covered for $420 million and $348 million respectively, aiming for settlement by year-end.
Viasat expressed gratitude towards departing colleagues for their contributions and reiterated its focus on expanding margins and profitability. The company's decision, while difficult, is seen as a necessary step towards achieving its long-term
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