NetApp Layoffs: CEO George Kurian Confirms Hit To Its SolidFire Business
Joseph F. Kovar
‘[Headcount reductions] were driven by the strategic alignment and focus that we have to prioritize our resources in the core storage systems and software business, as well as accelerating our public cloud services business,’ says NetApp CEO George Kurian.
NetApp CEO George Kurian late Wednesday confirmed reports that a new round of NetApp layoffs will hit the company‘s SolidFire all-flash storage technology business and the HCI hyper-converged infrastructure offering built on SolidFire.
Kurian, replying to an analyst‘s question during the question and answer period of NetApp’s first fiscal quarter 2021 conference call, confirmed reports that NetApp has realigned 5.5 percent of the company’s workforce, particularly in those parts of the business not aligned with NetApp’s go-forward priorities.
“You know, these headcount reductions are never easy to make,” he said. ”And we take care and consideration when we decide to make those changes. Those changes were driven by the strategic alignment and focus that we have to prioritize our resources in the core storage systems and software business, as well as accelerating our public cloud services business.”
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Kurian also confirmed changes to the SolidFire and HCI business.
“SolidFire, yes, I can confirm was part of the team that was impacted,” he said. ”We are narrowing our focus with the SolidFire and HCI portfolio to the high-margin parts of the market as we have signaled on prior calls. ”
NetApp channel partners said they were not surprised at the changes given the disruption the IT industry in general is seeing thanks to the COVID-19 pandemic and the resulting push by businesses for digital transformation.
The pandemic is bringing inescapable changes to nearly everyone, and businesses in particular are shifting their spending to the cloud, said John Woodall, vice president of engineering west for General Datatech, a Dallas-based solution provider and long-time NetApp channel partner.
Cloud growth is up, and cloud companies are hiring, and NetApp has been investing heavily in the cloud, including its three recent acquisitions of Talon, Spot, and CloudJumper, Woodall told CRN.
“We‘re seeing a potential re-allocation of expertise at NetApp,” he said. ”While cuts are painful, we’re seeing it as part of a shift to the cloud.”
NetApp‘s SolidFire and HCI are fantastic technologies, Woodall said.
“But we know that HCI was late to market,” he said. ”A company like NetApp needs to focus on where the success is. These are hard decisions. But they need to be made from time to time. Every business needs to look at what it‘s facing and make the hard decisions.”
The nature of the IT industry is continual innovation and disruption, said Brent Collins, global practice manager for data center infrastructures World Wide Technology, a St. Louis-based solution provider and long-time NetApp channel partner.
“We’re always sad to see teams scaled back, but know these individuals will have renewed success in future endeavors,” Collins told CRN. ”Our customers have had great experiences with NetApp SolidFire based products and solutions, and we look forward to working with NetApp to continue this track record of success.”