NetaApp CEO Tom Georgens Steps Down: Executive VP George Kurian Steps Up As CEO; Netapp Rumored to Cut About 500 Jobs?

Netapp Inc, the Data Storage Maker, has announced that the company's Chairman And Chief Executive Tom Georgens has resigned from his position.

Tom Georgens will be replaced by Netapp's Executive Vice-President of Product Operations George Kurian as CEO. The chairman position is given to Mike Nevens, Lead Independent Director.

Aside from the changes in the company's management, the company also announced that they will be dismissing about 500 jobs. The company's action to lay off employees is the result of lower sales.

The financial report in the 4^th quarter is below the estimates in May. Accordingly, the company's shares are behind 16 cents (about half a percent) at $33, in late trading.

Mike Nevens, now the present Chair of the board, said that NetApp is gearing towards "its next phase of innovation and growth", thus, the present change is necessary. Nevens expresses gratitude to former Chair and CEO Georgens for his leadership over 10 years.

NetApp further discloses that the company is looking for full time replacement. But despite the press release, questions like why NetApp did not make the change sooner are raised by some analysts.

Wells Fargo's Analyst Maynard Um (managing director and senior analyst in equities research) has maintained a Market Perform rating on the company. Um Said:

"We believe the CEO change and recent management departures reflect the challenges and difficult transition the company is facing. We expect the company's general direction and strategic plan under George Kurian to remain largely on course with a focus on the clustered Data ONTAP transition, restructuring, and investments in sales and channel growth. However, while the "interim" title was not given to Mr. Kurian's CEO role, the board intends to execute a CEO search, which, to us, suggests, the company may still yet contemplate and choose a different strategic direction (we believe growth M&A should be considered). Given the transition at the company, we maintain our Market Perform rating."

Though Kurian joined the company since 2011, and is now designated as the NetApp's present CEO, he said in an interview that he would be focusing on the improvement and efficiency of the company's operation instead of shifting the NetApp's product-development plans. He said further that "the board believes that the strategy of the company is right, but new leadership will accelerate the opportunity."

RBC Capital's Amit Daryanani said that NetApp higher ranking officials could acquire a host of options and evaluate them so that they could boost their shareholder value.