Nutanix Lays Off 2.5 Percent Of Global Workforce

‘Wherever possible, we tried to not impact quota-carrying reps but look at the non-quota-carrying reps in terms of this [reduction] process,’ says Nutanix CEO Rajiv Ramaswami.

Nutanix has reduced its global headcount of roughly 6,200 employees by 2.5 percent mostly in sales and marketing positions, CEO Rajiv Ramaswami said during the company’s third quarter earnings conference call on Wednesday.

“Efficiency is an important part of our path to profitability. We have increased our go-to-market productivity including more efficient digital marketing spend, increased leverage of our channel partners, and optimized headcount in geographies based on market opportunity. In connection with these efforts, we recently decreased our global headcount by 2.5 percent from within the sales and marketing functions as we continue to refine our go-to-market model,” said Ramaswami, who took over the reins at Nutanix in December. “We expect this action to yield approximately $50 million in annual savings.”

The San Jose, Calif.-based hyperconverged software superstar had approximately 6,210 global employees as of January 31, 2021. A 2.5 percent reduction in the company’s worldwide headcount means approximately 155 Nutanix employees were let go recently.

[Related: VMware CEO Raghuram On ‘Vigorously’ Competing With Nutanix]

Nutanix’s CEO said employee layoffs were mainly around where the company had “excess coverage” in specific market regions along with “creating room” to drive renewal sales.

“Of course wherever possible, we tried to not impact quota-carrying reps but look at the non-quota-carrying reps in terms of this process,” said Ramaswami. “So it was fairly distributed, not specific to one particular area.”

One huge area of focus and investment on the sales front, is Nutanix doubling down on channel partner enablement and engagement. “We are building out and leveraging the partner ecosystem more now. We are building out more solution-oriented selling,” said Ramaswami, adding that Nutanix is pushing partners to sell more newer products in its portfolio such as Era, Files and Flow.

On Wednesday, Nutanix reported the financial results of its third fiscal quarter 2021, which ended April 30.

Nutanix generated a total of $345 million in revenue, an increase of 8 percent year over year.

Total sales in annual contract value (ACV) billings, which Nutanix has focused on driving, climbed to $160 million in the third quarter, rose 18 percent year over year. ACV is the total annualized value of a contract excluding amounts related to professional services and hardware.

“We saw record ACV billings, with growth accelerating to 18 percent year-over-year, while our disciplined spending delivered operating expenses below our guidance,” said Duston Williams, chief financial officer at Nutanix. “Our growing renewals pipeline will help to drive future top line growth, offer substantial sales and marketing efficiencies, and increase the predictability in our business.”

Nutanix’s total operating expense was $450 million in the third quarter 2021, down from $476 million during the same quarter one year ago.

Overall, Nutanix posted a net loss of $123 million in the third quarter of 2021, significantly less than Nutanix’s net loss of $236 million in third quarter 2020. Bain Capital recently agreed to inject $750 million in funding into Nutanix.

In the third quarter, Nutanix added 660 new customers to bring its total customer base to nearly 19,500.