NetApp to cut 12 percent of its workforce amid weaker sales
Context & Ripple Effects
The February 2016 cut is NetApp's second round in under a year — it follows the May 2015 restructuring that eliminated about 500 jobs — and it lands just months after George Kurian took over as CEO from departing chairman Tom Georgens. Weaker sales forced a deeper reset than either predecessor round.
The scale matters for what comes next: even at 12%, the cuts did not stabilize the business, and NetApp returned within nine months with another reduction, the roughly 640-job, 6% layoff announced in November 2016. The company's acquisition-driven shift toward flash and cloud storage runs alongside a workforce that keeps shrinking.
First-order effects
- Roughly one in eight NetApp employees is affected immediately, with severance and restructuring costs hitting results while the company tries to right-size around weakening storage sales.
Second-order effects
- Competing enterprise storage vendors now face a leaner NetApp defending margins on price, while peers like Cisco — which separately reported declining revenue and moved to cut 5% of staff — confirm that cost-cutting has become table stakes across legacy hardware vendors.
Third-order effects
- Repeated annual reductions point to structural demand erosion rather than cyclical weakness: if the pattern holds, enterprise storage consolidates around fewer vendors whose headcount tracks the shrinking on-premises market while acquisitions like SolidFire attempt to buy growth in cloud-adjacent segments.
The trend: Legacy enterprise storage vendors are responding to cloud-driven sales erosion with successive rounds of layoffs layered onto portfolio pivots toward flash and cloud.