Storage company NetApp says it will lay off 6% of its global workforce, or about 640 employees, following layoffs in 2015 and from earlier this year
Context & Ripple Effects
This is NetApp's third workforce reduction in roughly eighteen months, deepening a restructuring that began with the 500-worker restructuring of May 2015 and accelerated with the 12% cut announced in February amid weaker sales. Stacked together, the rounds signal that the earlier trims did not fix the demand problem in its core storage business.
The timing matters because the company is simultaneously reshaping its portfolio: it has bought flash vendor SolidFire for $870M and is reportedly acquiring Israeli cloud-storage firm Spot.io for $450M, so the headcount cuts appear paired with a pivot toward flash and cloud rather than simple retrenchment.
First-order effects
- About 640 employees leave NetApp immediately, and the company carries a smaller cost base into a market where its February filing already blamed weaker sales.
Second-order effects
- Rivals in enterprise storage now face a leaner NetApp competing on price and margins, while NetApp's own capital shifts toward integrating SolidFire and the reported Spot.io deal instead of organic headcount growth.
Third-order effects
- If the pattern holds — repeated cuts alongside acquisitions — legacy storage vendors are funding their transition to flash and cloud-managed infrastructure by permanently shrinking the on-premises hardware organization around them.
The trend: Enterprise storage vendors are financing their shift from hardware boxes to flash and cloud services through successive, structural workforce reductions.