NetApp Laying Off 8 Percent Of Workforce

‘We must be agile, deliver on our near-term commitments, while positioning ourselves for long-term success. This means sharpening our strategy to focus on the areas of our business best positioned for growth, adapting our cost structure to reflect focus and market conditions and raising the bar on our performance,’ writes NetApp CEO George Kurian in an email to employees.

NetApp CEO George Kurian

Cloud storage and management technology developer NetApp Tuesday said it plans to lay off about 8 percent of its global workforce.

San Jose, Calif.-based NetApp in a Tuesday regulatory filing unveiled the planned workforce reduction as part of its “planned efforts to realign resources to prioritize investments against its biggest opportunities in light of the macroeconomic challenges and reduced spending environment.”

The planned layoffs are slated to be complete by the end of NetApp’s fiscal year 2023, which is expected to be April 28.

[Related: Tech Company Layoffs In 2023: The Latest Cuts In Q1]

This is not NetApp’s only recent round of layoffs. The company in the first six months of fiscal 2022 laid off about 1 percent of its global workforce as it restructured to reduce its office space due to the large number of employees working remotely, and another 1 percent were laid off in early fiscal 2023 as NetApp restructured to redirect resources to highest return activities.

NetApp had about 12,000 employees worldwide, according to a July 2023 U.S. Securities and Exchange Commission filing.

NetApp expects charges related to employee severance and benefit costs from the restructuring to be between $85 million and $95 million.

NetApp CEO George Kurian, in an email to employees the company included as part of the SEC filing, wrote that the firm has been discussing the impact macroeconomic issues, which are driving businesses to be more conservative in their IT spending, are having on NetApp.

“We are not immune to these challenges. Against this backdrop, we must be agile, deliver on our near-term commitments, while positioning ourselves for long-term success. This means sharpening our strategy to focus on the areas of our business best positioned for growth, adapting our cost structure to reflect focus and market conditions and raising the bar on our performance. Having successfully navigated similar challenges together with you before, I am confident that sharp focus on our strategy and strong execution will enable us to capture the opportunity ahead,” Kurian wrote.

Announcing the layoffs makes for a difficult day, and so while necessary to strengthen the company’s competitive posture, it does not overshadow the impact on employees, and the company is ready to continue offering customers the industry’s best storage, data, and cloud operations solutions, Kurian wrote.

“We have a strategy built on a foundation of trusted customer relationships, industry-leading innovation, and unmatched partnerships with all the leading public cloud companies. Even as we work through this difficult time, it is imperative we continue to deliver on our commitments to our customers, shareholders and our employees,” he wrote.

One NetApp channel partner reached by CRN who had heard the news earlier Tuesday and who preferred to remain anonymous said that during a meeting with the NetApp channel team there did not seem to be changes to that team.

“So far, no changes that I am aware of,” the channel partner said. “Only feedback is a broad, not targeted, impact.”

NetApp, in response to a CRN request for more information, replied with a prepared statement that read:

“NetApp deeply values its employees and the contributions they make to the business, however pressures of the macroeconomic environment, including significant impacts to the tech industry, have resulted in the need for organizational restructuring. Decisions that impact people are always difficult, and where possible, we will seek to redeploy employees into new positions. Where redeployment isn’t possible, we are offering comprehensive support to our people through these unfortunate circumstances. The company has been executing on its multi-year transformation to deliver the very best in hybrid, multicloud solutions to our customers. As part of that effort, the company updated its strategic focus, deepened its leadership bench, made several recent acquisitions, and adjusted its go-to-market approach to deliver on this vision. Where NetApp innovates and invests has always been, and will continue to be, driven by the evolving needs of our current and prospective customers. Today’s difficult but necessary initiative will enable radical prioritization and deliver increased focus in the most viable growth areas of the business.”

The first month of 2023 is turning out to be a tough time for employees in the IT industry, with tech layoffs impacting at least 17 companies, including NetApp and SAP, both of which disclosed layoff plans Tuesday.