Data storage giant NetApp, one of the largest employers in the Triangle, plans to lay off 500 workers worldwide in the wake of a disappointing fourth-quarter performance and an outlook for its first quarter that fell below Wall Street expectations.
NetApp sokeswoman Megan Fintland said the company isn’t disclosing how many employees are losing jobs at specific sites, including its Research Triangle Park campus. A year ago NetApp had more than 1,600 workers in RTP.
The layoffs, which the Sunnyvale, Calif.-based company announced Wednesday, will reduce the company’s overall workforce of 12,800 by about 4 percent.
“We are not satisfied with our results in the fourth quarter,” CEO Tom Georgens said during a conference call with analysts.
NetApp’s shares fell as much as 10 percent in after-hours trading Wednesday.
Georgens said that the growth of the storage data market has been slowed while “customers rebalance their IT investments to take advantage of the cloud.”
He added that although he is confident that NetApp’s cloud offerings have positioned the company well for the long-term, in the short-term the shift has had a greater impact on the company’s business than expected.
Chief Financial Officer Nick Noviello said of the layoffs: “We are committed to looking for efficiency, taking cost out of our structure, and to redirecting resources and people to highest-return activities.”
After laying off an undisclosed number of employees in RTP in 2013, last year NetApp announced plans to hire 150 workers to manage and maintain a new data storage center here.
NetApp has received nearly $8 million in state incentives since 2006 for three expansions of its operations in the Triangle. It could end up receiving more than $35 million in state and local incentives if it meets all of its investment and hiring goals.
The company’s most recent grant was awarded in 2012.
Under the terms of that grant, NetApp is eligible to receive $11.8 million if it retains 1,450 employees in addition to the 460 it planned to add by 2016. The company also is required to invest $75 million.
A Commerce Department official couldn’t immediately confirm whether the company received any money for jobs created in the first year of its grant. NetApp exceeded the job-creation targets for the incentive packages it was awarded in 2004 and 2007.
NetApp reported revenue of $1.54 billion in the fiscal fourth quarter that ended April 24, down 7 percent from a year ago. Analysts were expecting revenue to reach $1.59 billion.
Adjusted net income totaled $202 million, or 65 cents per share, down from $284 million a year ago. Analysts had expected net income of 72 cents per share.
NetApp released its quarterly results after the markets closed Wednesday. Earlier in the day, its shares closed at $35.33, down 2 cents. Its shares have declined 15 percent this year.