The closing of VMware’s $69 billion acquisition by Broadcom will lead to layoffs, with 1,267 VMware workers set to lose their jobs at the start of the new year.
Broadcom will lay off 1,267 VMware employees in January, the company said in a filing with the California Employment Development Department this week, made days after the $69 billion acquisition of VMware became final.
The first layoffs will come late in the month, and will affect workers at VMware’s Palo Alto offices. Multiple reports detailed that the layoffs had long been feared among VMware workers, and that they were reflective of continued struggles at the pioneering virtualization company.
It’s also standard practice for Broadcom to cut staff in the wake of acquisitions, as the company notably did after buying up CA Technologies, axing roughly 40% of that firm’s workers after completing an $18.9 billion takeover in 2018. A report from Bloomberg said that VMware had over 38,000 employees before the deal with Broadcom closed. The San Francisco Chronicle, which first reported the layoffs, said that an additional roughly 800 jobs are slated to be on the chopping block after the first round.
“This will not result in closure of the entire facility [in Palo Alto], but will only impact certain employees selected for layoff. This planned action is expected to be permanent,” wrote Broadcom’s vice president of human resources, Jill Turner, in a notice filed with the CEDD. “Affected employees do not have a right to displace or bump any other employee, and they will not be recalled to work.”
Stephen Elliot, a group vice president at IDC, said that the layoffs are likely to be popular with VMware customers and partners, who may appreciate the sense of renewed focus at the company.
“Sometimes as companies grow, they fund things that at the time might have been a pretty good idea, but as they mature, sometimes different priorities should be more of a focus,” he said. “That’s what Broadcom’s bringing to the table.”
Elliot harkened back to the CA deal in 2018 for an example of how Broadcom’s belt-tightening – which had long been a part of its plans for VMware in its public messaging about the deal – had actually improved the business units that it absorbed.
“As a point of comparison, Broadcom’s mainframe business has done better there than it did at CA,” he said. “As a customer or partner … there’s going to be a lot of people that step back and say ‘I like the focus.’”
In addition to the layoffs, VMware lost Sumit Dhawan, president of the company since 2021, who has left to become the new CEO of cybersecurity vendor Proofpoint.
Broadcom could not be reached for comment.
