Nutanix axes sales and marketing roles amid 2.5 per cent global headcount reduction

CEO Rajiv Ramaswami says cuts in staff are expected to yield $50m in annual savings

Nutanix CEO Rajiv Ramaswami has announced that the business has reduced its global headcount by 2.5 per cent in a sales call for its Q3 earnings.

The US business said it was continuing its move to a subscription-based model, reducing the length of its average contract term which had a negative impact on revenue despite an eight per cent year-on-year increase to $344.5m.

Ramaswami said the staff cuts are expected to yield "approximately $50m in annual savings".

Nutanix employs roughly 6,200 staff worldwide, meaning that around 155 positions have been cut from the business.

"We have increased our go-to-market productivity, including more efficient digital marketing spend, increased leverage of our channel partners and optimised headcount in geographies based on market opportunity," he said

"In connection with these efforts, we recently decreased our global headcount by 2.5 per cent from within the sales and marketing functions as we continue to refine our go-to market model.

"And of course, wherever possible we tried to not impact quota-carrying reps but look at the non-quota-carrying reps in terms of this process. So, it was fairly distributed and not specific to one particular area."

Nutanix's non-GAAP net loss stood at $86m for the quarter, or a loss of $0.41 per share.

The company's move towards a subscription model was seen in its annual contract value billings, which rose 18 per cent to $159.9m, while its run rate for annual contract value stood at $1.45bn which is up 25 per cent year-on-year.

"Q3 was a strong quarter across the board," Ramaswami added.

"We delivered another quarter of improved execution, continued momentum and outperformance on all our guided metrics."