NetApp insists jobs cull 'not driven by COVID-19'

Storage vendor is axing over five per cent of its global workforce

NetApp's planned layoffs are not a result of COVID-19 concerns or cost-cutting measures, the vendor told CRN.

CEO George Kurian told analysts in its Q1 earnings call that it is reducing its 10,800-strong headcount by 5.5 per cent, despite reporting a five per cent year-on-year increase in net revenues to $1.3bn.

He explained that the global job cuts are motivated by "strategic alignment and focus" on its storage systems and software divisions. He confirmed that SolidFire - which NetApp acquired in 2016 - and its hyper-converged infrastructure (HCI) teams would be most affected by the cuts.

"We realigned about 5.5 per cent of our workforce and those were in parts of the business - in all the functions of the business, but in those parts of the business that were not particularly aligned to our go-forward priorities," he explained on the call, transcribed by Seeking Alpha.

"I can confirm SolidFire was part of the team impacted. We are narrowing our focus with the SolidFire and HCI portfolio to the high margin parts of the market as we have signalled on prior calls."

When contacted by CRN for further information on the cuts, a NetApp spokesperson repeated Kurian's statement that the layoffs are a result of focusing on storage systems and cloud data services.

"NetApp is realigning resources and investments to best capture these opportunities and position the company for long-term success," they stated.

"These changes are a continuation of the transformation we are undertaking as we focus on driving growth for more customers globally by enabling their digital transformations and cloud journeys. They are neither motivated by corporate-level cost-cutting nor driven by COVID-19 concerns."

Those employees affected by the cuts have been "redeployed" to other roles, where available, and have been provided with a "comprehensive package" to support them, the spokesperson added.

Kristian Kerr, NetApp's VP of its EMEA organisation, told CRNin May that it had "no plans" on following rival Nutanix in furloughing staff at the time.

The storage vendor saw its share price jump 10 per cent on the back of the positive results.