Struggling data storage company NetApp, a major Triangle employer, is laying off 12 percent of its workforce as it takes steps to cut costs and streamline its business.
It’s unclear how much the latest job cuts will affect the California-based company’s Research Triangle Park operation. The majority of the job cuts, which would affect more than 1,400 of the company’s 12,000-plus workers company-wide, are expected to take place by the end of April.
“NetApp does not need to completely reinvent itself, but we do need to execute comprehensive and sustained transformation to deliver on our commitment to return to revenue growth and enhance profitability and shareholder returns,” CEO George Kurian said during a conference call with analysts. Kurian has been CEO since June.
NetApp issued a statement that said RTP employees would be impacted, but provided no specifics. The company also isn’t disclosing how many employees it has in RTP.
NetApp employed 1,772 employees in RTP at the end of 2014, according to data the company filed with the state.
The company received an incentive package from the state in 2012, but hasn’t filed data for 2015. Its $11.8 million incentives package is contingent on the company having 1,910 employees in RTP this year.
NetApp has had a series of layoffs in recent years, including the elimination of 500 workers company-wide last year, about 4 percent of its workforce at the time.
The latest job cuts are expected to deliver $200 million in annual savings. NetApp is also taking other measures that are expected to cut another $200 million in annual expenses.
Some of that savings will be re-invested in the business.
“Parts of our business are working well and growing, but we’re managing through declines in other parts,” Kurian said. Critic say the company’s market share is eroding because it fell behind the technology curve as businesses shifted to cloud computing.
The layoffs were announced Wednesday in conjunction with the release of fiscal third-quarter results that included a greater-than-expected drop in revenue and the company’s disappointing projections for 2017.
Revenue totaled $1.39 billion, down 11 percent. Analysts polled by Bloomberg News were expecting revenue to reach $1.45 billion.
Kurian attributed the decline to “an uncertain and volatile macroeconomic environment which is causing a slowdown in spending.” Moreover, he said, that reduced spending became “more evident” in January.
Adjusted net income in the quarter totaled $206 million, or 70 cents per share, down from $238 million a year ago. That was better than the 68 cents per share anticipated by analysts.
NetApp shares closed Thursday at $23.93, up 38 cents. Its shares have fallen 11 percent this year.