Shares of GoDaddy (NYSE:GDDY) have dropped today, down by 9% as of 3 p.m. EDT, after the company announced a restructuring that will impact approximately 814 employees. The broader market is also selling off amid renewed fears about the coronavirus outbreak, as cases within the U.S. continue to increase at an alarming rate.
The domain hosting tech company said that it is implementing a restructuring program due to challenges in outbound sales combined with ongoing uncertainty related to the COVID-19 pandemic. Outbound sales calls to customers are not effective in the current environment, according to GoDaddy. An estimated 814 employees will either leave the company, relocate, or transition to a different position within GoDaddy.
At the same time, GoDaddy reassures investors that the overall business remains strong and it now expects revenue in the second quarter to be approximately 1% higher than its previous outlook of $790 million. That forecast was issued in early May and factored in expected impacts from the coronavirus outbreak.
GoDaddy expects to incur roughly $15 million in pre-tax charges related to the restructuring, which will primarily consist of severance payments and other costs related to benefits. The company will also recognize an impairment related to certain lease assets that are currently valued at $58 million. GoDaddy did not specify how much this impairment would be.
Demand for its core domain and website offerings remains strong, and GoDaddy says it will reinvest cost savings back into the business to drive future revenue growth.