VMware staff on notice for job cuts as Broadcom finalises $61bn acquisition

Employees will receive one of three options: a Broadcom offer, a transitional offer, or a severance package

VMware, a company specialising in cloud computing and virtualisation, conducted a staff meeting last week during which it warned employees of impending layoffs.

The announcement came as Broadcom finalises its $61 billion acquisition of the company, expected to be completed in late October.

According to The Register, the meeting was a routine quarterly company update, which included an interactive Q&A session with the staff.

Last week, a Business Insider report stated that VMware CEO Raghu Raghuram and Chief People Officer Betsy Sutter conducted a meeting with senior directors, and that employees received an email from management discussing potential job opportunities for them. As per the email communication, VMware employees will be presented with one of three options for their employment status: a new employment offer from Broadcom, a short-term contract as part of a transitional arrangement, or a severance package on VMware's usual terms.

Employees, including managers, are unlikely to have the opportunity to select their preferred option, and managers are not expected to be informed in advance about their own or their teams' employment status.

Presently, no information is available to indicate whether job cuts will specifically target particular VMware business units or if they will be distributed across the entire organisation. The information regarding job cuts has not yet been officially confirmed by VMware.

A VMware spokesperson stated: "As Broadcom announced publicly, we expect the deal to close on October 30, 2023. While integration plans continue, VMware remains focused on executing its multi-cloud strategy."

Tom Krause, President of Broadcom, had earlier indicated that changes to VMware's operations were on the horizon.

Additionally, customers had already been informed about an impending swift transition, replacing perpetual licenses for VMware products with subscription-based licenses.

In August, Business Insider reported that Broadcom was considering significant reductions in staffing at VMware, raising concerns among employees about potential layoffs and challenges related to a cultural shift in remote work practices. There was also speculation among employees that certain units, such as the security division, might be spun off or sold as part of the broader changes.

Following the announcement of the acquisition deal, many employees and executives chose to depart from VMware.

"While we expect Broadcom's acquisition of VMware to close within Broadcom's fiscal year 2023, integration planning is not complete, and any rumours about post-acquisition plans are both speculative and premature," a VMware spokesperson said in August.

According to Securities and Exchange Commission filings, in February, VMware had approximately 38,300 employees, while Broadcom had around 20,000 employees in October.