Level 3 Cuts Jobs, CDN Group Still Growing; Should Do $45-50 Million

Dan Rayburn profile picture
Dan Rayburn

Level 3 (NASDAQ:LVLT) announced yesterday that it would be laying off 450 employees in North America or about 8% of its total workforce. While that's not good news for the company as a whole, the company has confirmed that the CDN group is not being affected and none of the cuts are coming from the content delivery markets group.While I expect a lot of the 115 open jobs listed on Level 3's website to disappear, Level 3 is currently looking to fill various positions in the CDN group.

As we put the final touches on our Frost & Sullivan report entitled World Video Content Delivery Networks Market, which breaks out CDN video revenue and market share, Level 3 will do between $45-50 million in total CDN revenue this year. While most of that revenue comes from small object delivery and not video, Level 3 is showing some good progress with its video CDN offering. $50 million in revenue for 2008 won't make any impact on Level 3's total company revenue, but it would rank them at number four in the industry based on total CDN revenue behind Akamai (AKAM), Limelight (LLNW) and CDNetworks.

That being said, Level 3's content delivery group can easily be affected if the rest of Level 3's businesses can't increase revenue, cut costs and reduce its debt. The job cuts Monday is intended to help reduce its costs but it is to be seen if that will be enough even in the short-term.

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Dan Rayburn profile picture
Dan Rayburn is considered to be one of the foremost authorities, speakers, and writers on streaming media technology and online video business models. An avid blogger, author and analyst, Dan is often referred to as the "voice of the industry" and has been quoted in more than a thousand news items by nearly every major media outlet over the past twenty years. His blog (streamingmediablog.com) is one of the most widely read sites for broadcasters, content owners, Wall Street money managers and industry executives in the online video sector. His articles have been published by the WSJ, NYT, CNN, Huff Post, Fortune, Business Insider, Gizmodo and he has been interviewed on Bloomberg, FOX, CNN, CBS, CNBC, and NPR amongst others. Due to his expertise in the content delivery market, he has also received invitations to speak as a witness at hearings by both the U.S. Senate and U.S. House of Representatives on topics pertaining to net neutrality, telecom mergers and content delivery architectures. He is also the Chairman for the NAB Streaming Summit conferences that take place in Las Vegas and NY. nabstreamingsummit.com

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