Workforce halved: Broadcom laid off 19,000 VMware employees since acquisition

Since the takeover, Broadcom has laid off more than half of VMware's employees. The developer of virtualization software currently has around 16,000 employees. This was reported by the US business magazine Business Insider. At the beginning of 2023, there were still more than 38,000 employees. While the share price and market capitalization rose last year, the figures have recently declined. Analysts are nevertheless satisfied.

Broadcom closed sites with too few employees

In recent months, Broadcom has laid off employees in the areas of marketing and partnerships, as well as from the VMware Cloud Foundation, according to reports from former employees and LinkedIn posts. Broadcom laid off around 2,000 employees and consolidated teams immediately after the takeover. The company also closed several business units, including end-user computing.

Broadcom also obliged its workforce to return to the office. The company closed locations with a low presence and cut the jobs there, a former employee told Business Insider. Even before the acquisition of VMware, employees and managers had already left the company. Staff turnover also contributed to the declining number of employees.

Analysts satisfied with Broadcom, customers not

Under Broadcom CEO Hock Tan, VMware switched to a subscription-based business model with multi-year terms. So far, around 60 percent of contracts have been converted to the new model. This has also benefited the value of the company. Last year, the price of Broadcom shares doubled, with market capitalization rising to more than one trillion US dollars in December 2024.

Since then, however, the trend has been downward. Share prices recently fell by more than 20 percent compared to the end of the year. Market capitalization most recently stood at just under USD 870 billion. Nevertheless, analysts rated the takeover positively and praised Tan's approach. They described VMware as a “star in the software sector”.

The company's customers were recently less satisfied. Due to the new business model, the costs for VMware licenses increased. This is why the Austrian cloud provider Anexia ended its collaboration with Broadcom. Customers such as Rackspace and OpenNebula also terminated their contracts. However, analysts at the US investment bank William Blair do not believe that this will have any long-term impact on Broadcom. Sustainable growth could reduce the impact of the decline in customers by 2027.

(sfe)