NetApp says cut of 900 jobs won’t stop its Wichita growth, hiring

10/09/2013 2:53 PM

08/06/2014 2:18 AM

Despite a NetApp announcement Tuesday afternoon that it would cut 900 positions in the U.S. and abroad, the company’s top Wichita executive downplayed the cuts here and said corporate plans won’t scuttle NetApp’s intentions to double its Rock Road workforce and invest tens of millions of dollars in facilities and equipment.

The Sunnyvale, Calif.-based high-tech data storage company said in a news release after markets closed on Tuesday that the cuts were part of its “resource realignment, which includes a global workforce reduction of approximately 900 employees.”

The company employs 13,000 people in 170 facilities in the U.S. and abroad.

Minutes after the release, NetApp vice president Joel Reich said in an interview with The Eagle that the breadth of those cuts were limited in Wichita. He also said that the company would not allow him to release the exact number of workers in Wichita whose jobs would be cut.

“We’re not saying for any of the sites what the numbers are,” said Reich, who oversees the Wichita operation. “I can tell you the impact in Wichita is small.”

When pressed for an exact number, Reich added, “Trust me, I would love to tell you the numbers because that would make it a short conversation.”

Reich said the restructuring will not affect NetApp’s plans to hire 400 more workers in Wichita – with an average annual wage of $73,000 – over five years.

“We’re continuing on the same path and strategy we had before,” he said. “So we did have some jobs eliminated here” but “we are still growing. We expect to continue to meet the deal we have that got us the incentives.”

Last September, the Wichita City Council and the Sedgwick County Commission agreed to each pay grants totaling $418,000 for NetApp, spread annually over five years, if it met criteria set out for adding jobs.

The company, which operates out of a nearly 400,000-square-foot facility at 3718 N. Rock, has more than 500 employees and will have added 115 of the 400 additional jobs by the end of 2013, Reich said.

“Some work that was being done at other sites ... the jobs are being transferred here,” Reich said. Again, he would not disclose exact numbers.

When the company announced the additional jobs, it had 450 Wichita employees. That August announcement also included an investment of $85 million in facilities and equipment.

In April, NetApp completed a “major” lab upgrade in Wichita and a “restacking” of office space to accommodate a larger work force, Reich said.

In Wichita, employees are responsible for new product development of NetApp’s E-series hardware and software product line. NetApp also employs engineers in Wichita who support customers of its E-series products and its other product line, FAS, Reich said.

“That was actually always the plan,” he said. “The support center (in Wichita) is not just for products we design and build here ... (but to) support our other products as well.”

Reich noted that NetApp has active job listings for Wichita, pointing to active job openings on its website, a search of which on Tuesday yielded 10 open positions locally.

NetApp said in its release Tuesday that it had net income of $505 million on revenue of $6.3 billion in its fiscal year 2013, which ended April 26. That compares with net income of $605 million on revenue of $6.2 billion in fiscal year 2012.

The company said it expected to take a $50 million to $60 million pre-tax charge from employee severance and restructuring charges.

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