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.
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.
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.
InvestingPro Insights
InvestingPro's real-time data and insights reveal a mixed picture for Viasat Inc. (VSAT). With an adjusted market capitalization of $2250M and a Price / Book ratio of 0.42 as of Q1 2024, VSAT is trading at a low multiple. This could be a potential opportunity for investors looking for undervalued stocks.
InvestingPro Tips highlights that VSAT is grappling with a significant debt burden and has not been profitable over the last twelve months. This may have contributed to the stock's significant drop over the past year. However, the company's revenue growth has been accelerating, and analysts are predicting that both sales and net income will grow this year. This positive outlook could be a sign of the company's resilience and potential for recovery.
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