Broadcom is planning drastic job cuts at VMware as its acquisition of the cloud company nears completion

• Broadcom is planning drastic cuts of VMware’s nonengineering staff, sources told Insider.
• Broadcom is preparing to close a $61 billion acquisition of VMware.
• Employees have been expecting layoffs after the deal closes.

According to two sources familiar with the situation, Broadcom intends to make significant job cuts at VMware, with a focus on non-engineering positions.

Broadcom is preparing to acquire VMware for $61 billion. The European Union and the United Kingdom recently granted Broadcom conditional approval to proceed with the transaction, while US authorities are still reviewing it. Broadcom expects the transaction to close during its fiscal 2023, which concludes this fall.

These layoffs could be announced around the time VMware reports its earnings at the end of August. According to the sources, the layoffs are expected to affect non-engineering positions where the two companies share services. They requested anonymity when discussing sensitive issues. According to one source, the job cuts could be severe.

“While we expect Broadcom’s acquisition of VMware to close within Broadcom’s fiscal year 2023, integration planning is not complete, and any rumors about post-acquisition plans are both speculative and premature,” a spokesperson for VMware said. Requests for comment were not returned by Broadcom.

According to Securities and Exchange Commission filings, VMware had approximately 38,300 employees in February, while Broadcom had approximately 20,000 employees in October.

Broadcom CEO Hock Tan has led the company on an acquisition spree in recent years, and he hasn’t been afraid to lay off large numbers of employees once deals close. After purchasing companies such as CA Technologies and Brocade, he cut thousands of jobs.

Employees at VMware have been expecting layoffs once the deal is completed, and Broadcom leadership has previously told VMware staff that it wants to make the company “lean and flat,” according to Insider. Several executives have already left VMware.

Customers are concerned about the transaction. Employees also expressed concern about a potential culture clash, as Tan has hinted at the end of remote work. Many employees believe Broadcom will spin off or sell VMware’s cybersecurity and cloud businesses.