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.Disclosure: None
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