Viasat is laying off 800 employees, or around 10% of its staff. Following the acquisition of Inmarsat, the company wants to combine the businesses. Viasat announced the employee cut on November 2, 2023. It further stated that layoffs would be spread across the company’s locations and divisions.
These layoffs occurred after Viasat completed the Inmarsat acquisition in May 2023. Following the layoffs, Viasat will continue to operate globally, with most of its staff remaining in the United States and the United Kingdom. The operator stated that this decision will save $100 million in annual expenses beginning in fiscal year 2025.
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About the company
Viasat is a communications company based in Carlsbad, California. The company has operations in the US and globally. Viasat offers high-speed satellite broadband services and secure networking technologies for military and commercial markets.
The operator needs help with technical challenges with the flagship ViaSat-3 satellite. It will supply only a percent of its expected capacity. Despite the ViaSat-3 concerns, the firm has stated that it would not acquire another satellite. Also, its leadership feels Viasat can meet its client commitments with its current fleet after the Inmarsat takeover.
Viasat declared in October 2023 that it had finished insurance claims for the Inmarsat-6 F2 and the ViaSat-3. It was because it experienced a power subsystem issue. Viasat has $420 million in insurance coverage for ViaSat-3 and $348 million for the I6 F2 satellite. The operator planned to complete both claims by the end of 2023.
Viasat Layoffs 2024
On November 3, 2023, Viasat stated that it was laying off 800 employees. It represents a sizable 10% of the total workforce. This most recent tech layoff is defined as a “rationalization of roles in its global business to attain both operational and cost savings.”
These tech layoffs are projected to save around $100 million each year, beginning in fiscal year 2025. These reductions are also anticipated to enable Viasat to meet its CapEx target of $1.4 to $1.5 billion, including capitalized interest.
Mass layoffs in the technology industry are never good news. But Viasat has huge goals that require severe measures. The company’s primary goal is to integrate its assets with Inmarsat. This is to provide essential safety and connectivity services in the following ways:
- aviation,
- maritime,
- government, and
- commercial sectors.
Sadly, these solutions require a reduction in the workforce.
While significant savings are expected, Viasat expects to pay roughly $45 million in charges. This is to achieve its goals. These charges are expected to occur in the second half of FY2024.
According to its president, Guru Gowrappe,
“The main goal of Viasat since acquiring Inmarsat has been to combine its organizational structures and technologies. This is to serve customers better. Also, we want to expand the company’s “leading role in global mobile satellite communications. We will keep working to unify our go-to-market approach better. Also, we will maximize operational and capital productivity.”
The decision to slash positions has been a “very difficult one. It is not something we take lightly,” Gowrappe stated. He added that the departing workers had been “integral to Viasat’s success story.” This is enough praise for those who have lost their employment.
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Viasat’s plans
Viasat’s headquarters will remain in Carlsbad, California. The combined company’s global headquarters will be at Inmarsat’s London office. Even those working at the Carlsbad headquarters are affected. Thus, 160 positions are set to be lost.
Gowrappe has claimed that the tech layoffs are necessary to help the business achieve long-term success. Due to subsystem anomalies, Viasat is also completing insurance claims for two of its 19 satellites.
Viasat also has ten more spacecraft in the works, with plans to launch them by 2027. With these planned projects and insurance claims, Viasat has had little choice but to lay off employees. Thus, layoffs are made to save money.
Observers believe that Viasat’s financial situation is in trouble. But this appears to be different. Recent data show that the company’s net worth is increasing. It has a current market capitalization of £2460 million. Viasat’s income has increased by 14.02% in the last year (as of Q1 2024). Also, their quarterly revenue growth in Q1 2024 was a substantial 35.6%.
Based on these data, Viasat’s financial conditions will likely improve. This indicates a promising future. As a result, many people were surprised to learn of the company’s tech layoffs.
A closer investigation revealed that Viasat has been spending heavily. Also, it is operating under a cloud of debt. According to many analysts, Viasat will face some hurdles. But its financial outlook is rather promising.
The acquisition of Inmarsat has several significant implications for Viasat. The most visible has been Viasat’s massive expansion of its satellite fleet. Also, its position in the satellite communications industry. This is welcome progress for Viasat, as competition in these areas has increased recently.
Conclusion
Viasat now owns the licenses that Inmarsat previously owned for electromagnetic spectrum usage. These licenses are issued by regulatory agencies such as the FCC in the United States. This serves a vital role in reducing interference between satellite operators.
Acquiring these licenses is a complex and highly competitive process. It often needs significant financial inputs. Viasat now has access to the world’s broadest coordinated L-band spectrum due to its acquisition of Inmarsat. Thus, it will create many fresh possibilities for the company.
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