NetApp to lay off 900, including some employees in RTP

jmurawski@newsobserver.comMay 21, 2013 

Data storage giant NetApp has qualified for more than $35 million in state and local incentives during the past decade for hiring and expansion in Research Triangle Park.

Those hiring incentives won’t spare the California technology company’s RTP site from the latest round of layoffs, NetApp officials said Tuesday.

But the staff cuts here aren’t expected to imperil the generous state incentives awarded last year, said Rich Clifton, NetApp’s senior vice president of Customer Success Operations. Layoffs do not disqualify a company from incentives as long as its employee count here meets the requirements stipulated in the grant.

NetApp employs more than 1,500 people in RTP, and Clifton said the company has exceeded its growth targets for now. He did not provide an estimate of how many in RTP will lose their jobs.

The company has received three state incentives packages since 2004. The most recent was awarded last year, when NetApp announced plans to create 460 jobs and invest more than $75 million in a new research and development facility in RTP.

The company is eligible to receive nearly $12 million if it meets annual investment and hiring goals over the next four years. Under the terms of the grant, NetApp must retain 1,450 jobs in the Triangle in addition to the 460 it plans to add in order to receive payments. It must sustain the new jobs for 10 years to qualify for $11.8 million in state grants.

Clifton said the company is on track to add hundreds more jobs in RTP.

“We’ve been ramping up very aggressively in this area,” he said.

NetApp plans to cut 900 workers worldwide, about 7.5 percent of its global workforce. The company is aligning its core functions with customer demand and shedding inefficient operations, Clifton said.

“The primary focus is about efficiency,” he said. “Our company is very healthy and has very strong prospects.”

NetApp reported 2013 quarter earnings Tuesday, saying that sales were up slightly to $6.3 billion but net income dropped 16.5 percent to $505 million. As part of that announcement, the company said it would shed 900 workers in a “resource realignment.”

NetApp has yet to receive any money from last year’s state incentives package. The company is eligible to receive its first payment in 2014.

Information was not available Tuesday on the total incentives the company has received from previous awards.

In 2004, NetApp was offered as much as $8.9 million for the creation of 361 jobs. In 2007, state officials offered NetApp $15.3 million if it added 646 jobs by 2017.

NetApp shares closed Tuesday at $36.53, down 56 cents. The stock is up 9 percent this year.

Staff writer David Bracken contributed.

Murawski: 919-829-8932

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