Storage giant NetApp has reported unremarkable revenue growth and falling profit for its 2013 financial year. It signals that NetApp is now a mature company and not a high-growth stock. But, behind the numbers, the firm has laid off hundreds of employees to help it stay in the black and keep investors at bay. The recently …
I'm no fan of NetApp, but I feel it's sad any time a company has loads of profits like that(they have more in profit then most of these smaller storage startups have combined in revenue) feels the need to lay off workers(I think this might be NetApp's first layoff ever?). In a down economy when your still able to pull off any level of profits would be a good time to invest even more to build for the future.
But that's not what these short timer investors want. Burn the employees and give me my profit, bitch.
It is the part of current investment or maybe I should say gambling culture that is destroying our economic system.
Instead of companies being run on a 10 year horizon, medium to long term, it seems that they do anything to appease Wall St on a quarterly basis. Their actions may not be good for the company in the medium to long term but in the showr term it allows the company stock price to be maintained and the CEO to get his bonus. In the medium to long term these actions usually hort stock price but the gamblers don’t care.
Not the first layoff, there was another in 2008 (I think). Many people are leaving NetApp to see what they can make of themselves in the multitude of enterprise startups both in traditional storage, and sofware-defined <x>
Couldn't have put it better myself.
Wall Street's fascination with the next three months to the detriment of any long term viability is a cancer.
One of the reasons that HP is hurting so much now (only one mind) was that Hurd systematically cut investments in areas that hurt the long-term viability of the company. And he was richly rewarded for it.
I just came in here to upvote whoever said "profits dove," but nobody did. But I forget I'm at a uk site here... Merriam-Webster online says that use of "dove" as past tense is rare in British English and "equally common" with "dived" in American English, not that I've ever heard an American use it, then gives only two past-tense examples "She dove into the swimming pool." and "The whale dove into deeper water." If it's so common, what about an example? Alternatively, if M-W, an Encyclopaedia Britannica company, is so USA-focused as to only provide US English examples, what's all this talk about the "north Midland areas?" I've never heard of the "Midland." Is this some new politically correct way of talking about Indiana?
The phrase that had ruined R&D and long-term planning...
...is "shareholder value."
Everything now is for the short-term, "make the investors happy even if you have to completely gut R&D/payroll" formula.
Companies can't invest in R&D, because the board doesn't feel that money reflects positively to the present shareholders - so you sacrifice the future to make some people happy today. I've been part of two companies that were private but then choose to go public.
The first thing that disappears are employees perks. One company used to have soda countains for free in the halls because of the long hours employees would put in. Gone. "That money should go to the stockholders!" All their quality employees are gone - replaced by drones who make 1/3 as much and have 1/4 the productivity.
One company had an amazing 10 year cycle - fueled by R&D. Gone. ""Money 10 years down the road doesn't reflect value to our investors today!" That company is a shell of what it once was.
It almost seems criminal.
FAIL, as I think the whole system has failed - and it's bringing everything down with it.
If you make money and are still unhappy, bored, or being accused of doing very little to earn your salary, fire a load of people to show you're still there...simples.
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