- As VMware prepares for an acquisition by Broadcom, employees say they are uncertain about its future.
- Employees told Insider they were more concerned about the layoffs as Broadcom was likely to cut costs.
- They were also concerned about losing the benefits of remote work and VMware’s focus on DEI’s efforts.
Employees at software giant VMware are facing a series of uncertainties following news that chipmaker Broadcom plans to acquire it for $61 billion.
As soon as the deal was announced, the specter of layoffs began to loom over VMware, which had around 33,000 employees at the end of 2020. Under the leadership of CEO Hock E. Tan, Broadcom has earned a reputation for buying too many companies — and then aggressively cutting costs.
It looks like it can follow the same VMware playbook: In late May, Broadcom’s leadership told a town hall meeting that, under its supervision, VMware would become “lean and flat,” an employee present at the meeting said. And in an investor presentation, Broadcom said it would be “eliminating duplicate general and administrative functions” at VMware to increase profitability.
Insider spoke to four VMware employees about the deal, who agreed that the uncertainty surrounding the layoffs fueled a greater sense of doom and gloom at the company.
While some VMware employees are adopting a more optimistic “wait and see” attitude, company insiders said, some are already struggling to find new jobs where things are a little more stable. Many want to get an early start in their job search, as layoffs and hiring freezes in the industry have exacerbated employee concerns about moving to another company.
Employees fear that with Broadcom, VMware will lose much of what they believe makes it special—specifically, a culture that values innovation, diversity and flexible work styles over a cold focus on profits. In a more practical sense, too, it won’t be clear until the deal is closed how Broadcom plans to cut or reorganize VMware’s product lines.
“From now until then, it almost makes work meaningless or difficult because we don’t know if our product will continue after six months,” said a VMware employee.
VMware said in a statement that it was “too early to make assumptions about the outcome of Broadcom’s unsolicited acquisition proposal.”
“Upon closing the transaction, Broadcom Software Group will operate and rebrand as VMware, incorporating Broadcom’s existing infrastructure and security software solutions as part of the VMware portfolio,” the statement continued. “Combining our assets and talented team with Broadcom’s existing enterprise software portfolio, all under the VMware brand, will create a remarkable enterprise software player with a continued focus on technology innovation.”
A culture shock may be brewing
Some officials said Broadcom’s takeover bid was shocking, especially as VMware spun off from Dell just last year. The Palo Alto-based software giant has had a tumultuous few years, with former CEO Pat Gelsinger leaving to Intel amid other executive changes.
“The internal dialogue was that we would go back to our former glory as an independent company,” said one employee.
Tan, the CEO of Broadcom, has tried to assuage some of those concerns, promoting the idea that the two companies will be stronger together.
“In terms of aligning our values, we appreciate that VMware’s culture is built on execution, passion, integrity, customers and community. We also share values like these. At Broadcom, we prioritize responsibility — to our customers, our partners, our shareholders and each other,” Tan wrote in a letter to employees earlier this month.
Some employees, at least, aren’t so sure, citing perceived differences between VMware’s more flexible corporate culture and Broadcom’s tighter business approach.
“We are concerned about a culture clash between their company and ours,” said an employee. “I know VMware is very employee-centric, which is why a lot of people work there.”
For example, employees said that while most VMware employees could work from home, Broadcom leadership indicated that they generally wanted employees to work in person. Working from home “gives you a lot of freedom and flexibility to do your job and take care of your family,” said one employee. “This is extremely important to me. It doesn’t align with Broadcom’s way of operating.”
And for VMware employees, the company’s focus on diversity, equity and inclusion has been a source of pride. Broadcom does not appear to share those values, an official said. Some intend to present demands to Broadcom leadership, pressing them to uphold key elements of VMware’s commitments to diversity, equity and inclusion, remote work and its much-appreciated health benefits plan.
“They only care about shareholder value and are not going to continue the programs that VMware employees are used to, the things that we value,” the employee said of Broadcom. A Broadcom spokesperson said that last year the company launched Diversity@Broadcom, an initiative to promote DEI across its workforce.
Amidst all this, the company’s leadership is asking employees to be patient and see what happens – a message that has resonated with at least some employees, who want to see what happens before they decide to make a change.
“I think management’s general approach is, ‘There’s a lot we don’t know. Stand by. Don’t panic. We’ve got a long way to go,'” the official said.
VMware’s full statement:
“It is too early to make assumptions about the outcome of Broadcom’s unsolicited acquisition proposal. While the move may be difficult, we view this transaction as an opportunity to accelerate our multi-cloud strategy. Upon closing of the transaction, Broadcom Software Group will operate and rebrand as VMware, incorporating Broadcom’s existing infrastructure and security software solutions as part of the VMware portfolio. complex.”
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