NetApp's will lay off 12 percent of its workforce following a rough third quarter and outlook.
In a regulatory filing, NetApp said it would restructure to cut expenses and cut 12 percent of its workforce through the first quarter of fiscal 2017. The company plans to take a charge of $60 million to $70 million for terminations.
Most of those charges will be taken in the fourth quarter.
In an earnings release, NetApp CEO George Kurian said:
To position NetApp for long-term success, we launched a transformation program designed to streamline the business and reduce our cost structure, while at the same time, maintaining our ability to invest in strategic opportunities. We are confident that we have the right strategy to further pivot the company toward the growth areas of the market and deliver long-term value.
The restructuring comes after a mixed quarter. The company reported third quarter earnings of $153 million, or 52 cents a share, on revenue of $1.29 billion. Non-GAAP earnings for the quarter was 70 cents a share.
Wall Street was looking for third quarter earnings of 68 cents a share on revenue of $1.45 billion.
As for the outlook, NetApp projected revenue of $1.35 billion to $1.5 billion on earnings of 55 cents a share to 60 cents a share. Wall Street was expecting earnings of 72 cents a share on revenue of $1.51 billion.
With the restructuring, NetApp is likely to double down on all-flash equipment via its acquisition of SolidFire. The company is also looking to become more of a software player, but faces competition from the likes of VMware and others.