VMware Layoffs Begin, vCloud Air Unit Takes Brunt

VMware, whose parent company is set to be acquired by Dell as part of the largest deal in IT history, reportedly began laying off employees this week, just ahead of its fourth-quarter earnings announcement.

In an article on Tuesday morning, Fortune's Barb Darrow reported that the layoffs began on Monday, citing company sources and a message board in which employees are anonymously discussing their experiences. A source for RCP sister publication Virtualization Review also confirmed the layoffs.

Update, 1/27: VMware confirmed in its Q4 earnings call late Tuesday that is it laying off about 800 employees in the first half of 2016.

According to Darrow, "various parts of the vCloud Air teams -- personnel in Europe, the Middle East, and Africa (EMEA), the Burlington, Ontario, customer support group, and Colorado -- were cut." 

Fortune reported last week that about 900 workers were scheduled to be laid off in total. VMware is believed to have about 18,000 employees globally.

The specter of layoffs has loomed over VMware ever since it was revealed last October that Dell was going to buy VMware's parent company, EMC, for $67 billion. There wasn't a lot of overlap between VMware's core business and Dell's, but cost-cutting frequently follows such mergers.

Some of the comments on the message board, from the site, provide insight into the areas that were hardest hit. One commenter wondered if vCloud Air -- VMware's private/hybrid cloud platform -- is in trouble: "I'm an alliance partner. What I'm seeing is that most of these cuts are coming from vCloud Air. Is VMware giving up on that product?"

Another one says that "VMWARE is suffering. Weak middle management decisions leave a lot of employess (sic) woundering (sic) direction and nothing gets done. There is no accountability and it is definitely who you know."

Perhaps the most ominous post on the site was from this poster: "We all know that there is a layoff going on right now. My question is: Is there more to come later this year? Is this the only round of layoff in 2016?" It's a question VMware employees will likely ask themselves throughout the year.

About the Author

Keith Ward is the editor in chief of Virtualization & Cloud Review. Follow him on Twitter @VirtReviewKeith.