Nutanix bosses take pay cut as revenue drops

CEO claims that the hyperconverged vendor will look into more ways to cut operational costs, claiming virtual .NEXT conference will be a commercial success

Nutanix execs have taken a 10 per cent pay cut since the start of April in an effort to manage costs during the COVID-19 crisis.

At the start of the month Nutanix confirmed to CRN's sister title CPI that it has asked non-US staff to take two weeks' voluntary unpaid leave. The news emerged after the hyperconverged vendor furloughed more than 1,400 staff in the US - equating to around a quarter of its global workforce.

But now Nutanix's CEO has told investors that it will look into more ways to cut operational costs as it responds to financial pressure from the COVID-19 crisis.

"We have implemented two non-consecutive single weeks of unpaid time off for many of our employees around the world, one week in each of our Q4, FY'20 and Q1 FY '21. We have carefully coordinated these actions to minimise the impact on our customers and our employees, while prioritising temporary measures such as furloughs instead of permanent changes such as layoffs," he said.

"We also believe in sharing the burden across all levels of the organization and as such our executive team took a 10 per cent reduction in salary starting in April. Our efforts are not stopping there as we continue to look for areas to save on operating expenses more broadly."

Speaking to investors on a conference call as Nutanix posted its Q3 results, CEO Dheeraj Pandey said he is looking into more areas where the company could save on operating expenses.

He pointed to Nutanix's annual .NEXT conference which has gone virtual-only for the first time this year due to the COVID-19 crisis. He said there are early signs that the conference will be a commercial success in its virtual form, at less than half the cost of its usual in-person format.

The CEO described the COVID-19 crisis as an"annealing" process for Nutanix and the first recession it has navigated in its 10-year history.

"Most long lasting companies that went past their first decade, went through an annealing process during a recession and came out stronger. We have been able to quickly assess the situation and make informed real-time changes to how we operate our business," he said.

"Is a process of re-crystallisation and gaining more strength."

Pandey's comments come as Nutanix posted its fiscal Q3 results which show an 11 per cent revenue increase year on year to $318.3m. But net losses widened on a GAAP basis to $240.7m compared to $209.8m in its Q3 last year.

Nutanix's competitors have also introduced measures to manage costs as their finances continue to be put under strain due to the COVID-19 pandemic. Dell recently removed employee benefits such as retirement plan contributions and froze pay rises, internal promotions and external hiring until at least the end of the year.

VMware took similar steps earlier this month, while HPE and IBM have committed to reduce their workforces and make layoffs.

Today Nutanix also announced that it has snared a NetApp executive to lead its global systems integrator business in EMEA.

Adam Tarbox joins Nutanix after a decade at NetApp, where he most recently held an equivalent role leading the storage vendor's EMEA global SI business. He previously led NetApp's service provider channel in the UK.

Nutanix claims Tarbox will lead a team dispersed across the region and will focus on driving the firm's go-to-market activities and joint offerings with global SIs.

"GSI partners are a key element of our ability to deliver exactly what customers need, both in EMEA and the rest of the world. We currently work with almost half (44 per cent) of ‘global 2000' companies. Delivering with, and through, tier-one partners allows us to engage more effectively with those enterprise customers, develop joint offerings and create the solutions they need to solve their business challenges most effectively," Tarbox said in a statement.

SVP of EMEA for Nutanix, Sammy Zoghlami, added: "Adam's background and experience makes him the ideal person to drive Nutanix's strategic engagement with GSI partners and develop innovative joint solutions that support our customers' requirements across the region."