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NetApp Cuts 8% Of Its Workforce To Cut Costs



NetApp Cuts 8% Of Its Workforce To Cut Costs

(CTN News) – Earlier today, NetApp Inc. announced plans to lay off 960 employees, or approximately eight percent of its global workforce.

In February, the company announced that its next quarter’s earnings would fall short of expectations. During the quarter ended January 28, NetApp expressed an expectation of revenue between $1.525 billion and $1.675 billion. Analysts estimate revenues of $1.71 billion.

In recent months, the tech industry has experienced a wave of layoffs. Several major players in the enterprise technology market have also announced reductions in their workforces since the beginning of the year. These include Microsoft Corporation, Cisco Systems Inc., Google LLC, and others.

According to a memo to employees sent by Chief Executive Officer, George Kurian, today is undoubtedly a difficult day. We are taking the appropriate steps to strengthen our competitive position and provide us with the opportunity to emerge from this season better than we were before, but they do not overshadow the impact that an action such as this has on the team as a whole.”

By April 29, NetApp expects to have completed the workforce reduction. Layoffs are expected to cost the company between $85 million and $95 million.

NetApp, based in San Jose,

California, is a major provider of on-premise data storage systems. In addition to traditional disk appliances, the company manufactures all-flash arrays. The company’s high-end AFF arrays are used to run data-intensive applications such as AI and analytics tools.

NetApp’s all-flash arrays drive most of its sales. Public cloud revenue growth drives the company’s revenue growth. This business sells software for managing cloud-based data storage.

ARR for its all-flash arrays reached $3.1 billion in the second fiscal quarter after growing 2% year-over-year. In the same time frame, its public cloud ARR rose 55% to $603 million.

Cloud Volumes ONTAP, a cloud edition of the operating system, powers its on-premises flash arrays. There are managed versions of the software available in Google’s, Amazon’s, and Microsoft’s cloud platforms.

In addition to its growth strategy, NetApp has other components as well. The company spent $450 million in 2020 to acquire Spot, a company that developed software to reduce cloud infrastructure costs.

The company has since developed a suite of cloud management products based on Spot’s technology.

NetApp recently introduced BlueXP, a software-as-a-service platform. With the platform, administrators can manage cloud and on-premises flash arrays from a single interface.

“NetApp continues to offer our customers industry-leading storage, data, and cloud operations solutions,” Kurian wrote today in an internal memo.

Our strategy is built on a foundation of trusted customer relationships, industry-leading innovation, and unmatched partnerships.

A profit per share of $5.30 to $5.50 is expected to close the company’s fiscal year ended April 29 in 2023. In addition, it expects revenue growth between 3% and 5%. As of the end of fiscal 2022, NetApp’s public cloud revenue run-rate was $505 million, up to $700 million.


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