Less than a week after Broadcom finalized its $61 billion acquisition of VMware, the layoffs began. This is a familiar pattern for the company, which followed a similar playbook with its acquisition of CA Technologies in 2018.
According to one source quoted in Channel Futures, Broadcom plans to lay off around 2,000 employees across a number of locations, including Broomfield, Colorado, Atlanta, Georgia and Bellvue, Washington. It's likely that the overall number of job cuts will be much higher. Another anonymous VMware source said Broadcom would likely lay off between 10,000 and 20,000 employees. Mass cuts fit with Broadcom's goals to increase its profitability and its history. Broadcom is seeking to reach $8.5 billion in operating EBITDA. According to Fitch Ratings, Broadcom is currently at $5 billion in operating EBITDA.
WARN notices filed in Georgia and Colorado showed 401 VMware employees impacted by Broadcom layoffs. The Georgia notification showed that 217 employees would eventually be let go, and the Colorado notification showed 184 people.
Earlier this year, VMware employees were told they had three possible options: An offer for a Broadcom job, an immediate severance or a transitional role that would last about a year.
In Atlanta, Broadcom said the first "date of separation" will occur on Jan. 26, 2024, followed by Feb. 2, March 1, April 26 and May 24. The layoffs at the Broomfield, Colorado, location will start and end on Jan. 26.
Cuts at the Georgia location are impacting numerous positions, including technical staff, product marketing, network engineering and partner sales management, according to VMware.
Tech Industry Layoffs
Google, Amazon, Snap, Splunk, LinkedIn, Cisco, MariaDB and SecureWorks all recently announced layoffs. Other mass layoffs recently included Intel, Wish and LinkedIn in the San Francisco Bay area.
At the beginning of September, Rapid7 announced a restructuring plan following disappointing second-quarter results, resulting in the layoffs of about 18% of the company’s workforce.
Similarly, AppSec firm Snyk laid off 128 people in April. Cloud security vendor Zscaler announced layoffs after what it called a rough fiscal second quarter. Software tools giant Atlassian laid off 5% of its workforce as it “shifted priorities.”
Accenture announced yet another round of layoffs in Austin in early October after axing 19,000 jobs, and Veeam laid off 3.8% of its workforce in August.
Oxford, U.K.-based platform security vendor Sophos in January laid off 10% of its staff, or 450 workers, while San Francisco-based identity security giant Okta axed 5% of its workers – or roughly 300 employees in February.
Layoffs.fyi, a website that has documented tech company layoffs since the COVID-19 pandemic began, reported that approximately 242,000 employees have been laid off thus far in 2023.
Channel Questions Remain
And questions remain about what the acquisition will ultimately mean for partners and the channel.
Broadcom CEO Hock Tan asserted throughout the acquisition process--in blogs and after attending the VMware Explore conference--that VMware channel partners were welcome and would have a home with Broadcom. He told VMware Explore attendees that, upon completion of the merger, Broadcom would invest $2 billion into VMware and its channel partner organization. But, as Channel Futures reported, partners have reacted differently to those assertions over the intervening months.
CRN reported earlier this month that some partners were considering other vendor options, especially in light of the regulatory approval delays, including Nutanix and Cloud Software Group, a company that formed from a merger of Citrix and TIBCO.
In a Q&A session with VMware partners, Tan implied that the ecosystem would continue. "VMware's partner ecosystem is a highly successful machine, and we don't plan to turn that upside down. Together following closing, we will accelerate its growth and momentum to help move forward our mutual customers' businesses," he said.
"VMware's collaborations across the ecosystem, combined with Broadcom's exciting technologies, innovative partnership models and deep relationships, will enable partners to better capitalise on new business opportunities and create differentiated solutions that they can replicate with other customers. We also see opportunities with existing Broadcom Software solutions to create even more value for partners across the combined network."
As news of the layoffs spread, partners told CRN that the situation was 'chaos' and expressed concerns about the future of their relationship with the company.
