Cloud data management expert NetApp says it will eliminate 8% of its workforce, or roughly 960 workers, due to the current economic climate

One of the major players in cloud data management, NetApp, announced today that it would lay off 8% of its workforce, blaming the current market’s “reduced spending environment” and “macroeconomic challenges.” According to estimates, the company employs about 12,000 people worldwide, meaning that 960 people will be affected. NetApp announced that it would start the process this quarter and anticipates deducting between $85 million and $95 million from its earnings as a result.

We’ve gotten in touch with the business to find out which product lines or job categories might be affected. The cuts appear to be spread across several regions, including EMEA and Asia-Pacific.

NetApp, based in San Jose, is a Nasdaq-listed company with a market value of just over $14 billion. Like many tech stocks, NetApp has experienced a year-long share price rollercoaster and a general decline in value.

Businesses are currently spending significantly less on IT, which has been putting a lot of pressure on tech companies that count them as clients. During the Covid-19 pandemic, cloud service providers experienced a huge increase in demand due to both the general increase in the use of digital channels for work and play and the investments made by businesses in so-called “digital transformation” and the updating of systems to work with newer technologies. As part of that effort, NetApp itself splashily acquired Spot.io for $450 million.

However, in general, even cloud businesses have not escaped the more recent downturn’s effects, which include a decline in consumer demand for their goods.

“Companies are dealing with a macroeconomic environment that is getting more difficult, which is leading to more conservatism in IT spending. In a memo to staff members today, CEO George Kurian stated that “we are not immune to these challenges.” In light of this, we must be adaptable, fulfill our immediate obligations, and set ourselves up for long-term success. This entails honing our strategy to concentrate on the parts of our business that are most poised for growth, modifying our cost structure to reflect our focus and the state of the market, and raising our performance standards. Having successfully navigated similar obstacles with you in the past, I have faith that a laser-like focus on our strategy and excellent execution will allow us to seize the forthcoming opportunity.

Indeed, layoffs are nothing new for NetApp. Within a few months of one another in 2016, the business laid off 12% of its workforce, followed by another 6% under Kurian’s leadership as CEO. This time, it is a part of a larger wave of price cuts affecting the entire tech industry, affecting both major consumer and enterprise vendors.

Google (12,000), Amazon (18000), Groupon (5,000), SAP (3,000), IBM (3,900), and other companies have also recently announced layoffs. According to Layoffs, there have been over 76,000 layoffs in the technology industry this year alone, counting this most recent round at NetApp. fyi. That rate is enormous and extremely unsettling. There were 159,684 in the entire year of 2022, but we’re only two months in.

With guidance of net revenues in the range of $1.525 billion to $1.675 billion and non-GAPP earnings of $1.25 to $1.35, NetApp last quarter outperformed in terms of both earnings and revenues. When the company reports its third quarter results on February 22, let’s see how it did.