A published report yesterday revealed that more than 2,800 VMware employees have already received layoff notices in the U.S. alone, following last month’s approval of Broadcom’s US$69 billion acquisition of the company. Factoring in other nations including Canada, that number is expected to rise substantially.
Scott Young, principal advisory director at Info-Tech Research Group, told CDN earlier this week that layoffs at Broadcom were expected upon the closing of the deal.
The company, he said, has “a proven track record of efficiently integrating acquisitions and ensuring that its Total Debt to LTM Adjusted EBITDA ratio trends relatively rapidly downward. Its playbook to do this will include immediately eliminating duplicate and administrative functions wherever possible as soon as possible. The expectation would be that the bulk of layoffs will fall into these categories.”
The recent restructuring of VMware into four divisions (VMware Cloud Foundation, Tanzu, Software Defined Edge, Application Networking and Security), added Young, “shows that Broadcom sees growth in infrastructure and potentially has less interest in the (unmentioned) end user compute area of the business. This could potentially lead to another area where jobs could be eliminated.”
