Storage Giant NetApp to Lay Off 960 Employees, 8% of Workforce

Storage giant NetApp will lay off 960 employees during the next three months, amounting to 8% of its workforce. NetApp announced the planned layoffs in a filing on Tuesday with the Securities and Exchange Commission (SEC).

NetApp’s George Kurian

CEO George Kurian said NetApp must reduce costs due to declining economic conditions resulting in more “conservative” IT spending. Kurian is the latest in a chorus of CEOs who have announced the need to reduce costs through massive layoffs.

“We are not immune to these challenges,” Kurian said in an email to employees. “Against this backdrop, we must be agile, deliver on our near-term commitments while positioning ourselves for long-term success.”

Reduced Revenue Forecast

In November, NetApp lowered its revenue outlook for the rest of its fiscal year during its Q2FY23 earnings report for the period ending Oct. 28, 2022. The reduced revenue forecast called for $1.525 billion and $1.675 billion, down from $1.7 billion. In its SEC filing, NetApp said it would take charge of approximately $85 to 95 million for severance costs.

At that point, Kurian said there were already signs of economic headwinds. “As we moved through the [second] quarter, we saw increased budget scrutiny, requiring higher level approvals, which resulted in smaller deal sizes, longer selling cycles, and some deals moving out of the quarter,” Kurian said during the company’s earnings call at the time. “In Q2, we felt this most acutely in the Americas high tech and service provider sectors.”

Kurian noted during that earnings call that NetApp had already instituted a hiring freeze and was reducing discretionary spending. “We will remain disciplined as we continue to shift resources away from lower yield activities to our biggest opportunities,” he said.