After the deal closes, based on previous acquisitions, what will Day-1 look like? C-Levels/VP's gone day-1 or later? Immediate layoff notifications? PSO Immediately sold off? EUC Immediately spun off? @broadcom.com email address for everyone? Daily commute to office? Snacks removed from Office?
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@1gae+1lEuJnBw you say that you know what it looks like for vmware, can you elaborate on this please?
It's that's line of thinking that has ki-led this company. Vmware no longer has a choke hold on customers. There are alternatives. You can not just jack up prices. The trend is not out friend.
I agree with a lot of what @2law+1lEuJnBw has just said, however while there will be cuts, and a lot of them, I don’t think it will be in the magnitude posted.
A very easy way for BC to increase revenue is to stop the HUGE discounting that happens for large deals. This would add billions to the revenue for almost zero effort. I’ve seen 60% discounts on some really large deals. Why.?. These customers are locked into VMware, they can’t leave us without experiencing huge pain, BC knows this. Stop discounting, revenue increases by doing very little extra work.
But…. there will be 1000s of layoffs in the 1st year. That’s a certainty. Sadly.
Anyone remember this document?
https://investors.broadcom.com/static-files/232c0cd2-02d9-4704-bb7b-5659cef67fae
So as a crude strawman, if we are 12.9B revenue, 37000 staff, BCOM work to a ratio of 1M rev per head, at 12.9B that is 12900 staff which would be a reduction of 24,100.
On 12.9B our profit is now 4.4B, that means our costs are 8.5B, they say they will increase profit to 8.5B that is a reduction in costs of 4.1B, so 21,900 redundancies at 150k average salary? 3.6B. Maybe more. Some obvious areas executives shared services Facilities HR legal Finance. Thin out the thick middle management layers. Large push to low cost areas. PS and Support pushed to Partners. The other 1B from selling a few other businesses, prices up 10%-15% per year, you can see how the model will develop. They see VMW as bloated and inefficient and a golden opportunity to increase their topline revenues, reduce cost heavily, increasing overall profit whilst paying down the debt. That in turn increases the share price, which is their ONLY goal. It is a simple successful model very similar to a PE company. Buying us for a profit multiple of 13 is a good deal in the current climate, some sell as low as 6.
We will unfortunately just be on the wrong side of it. I have not seen or read anything that tells me they will be doing anything differently this time. The VMW brand gives them credibility.
I'm with you. Bring the popcorn. On another note, many believe Zuck is a major POS
Many thanks to @1gae+1lEuJnBw for sharing the previous link with the detailed overview of what to expect from the BC acquisition.
Btw what will happen to the PA campus? Will no one think of the turtles??!!!
I love the idea of a fat W2, busy days, and no politics bc you're too busy for it! Bring it on!
I have never seen a company as fat and happy as VMW. It's like all the years of efficiencies pursued by other tech vendors happened to everyone else, and VMW hung out in a cave somewhere, untouched by all of it. Those days are long over, as we know. Even Meta just announced another 10K layoffs. Zuck is becoming a management machine, and good for him.
There are at least 2 FTEs if not more per 1 job at VMW, with new people being hired all the time. Tons of overlap in roles, esp in GTM and channel. These myriad of senior directors, VPs and SVPs just build their fiefdoms, with no regard for productivity or outcomes. It all will crash down soon enough, and I am so here for it. 🍿
We are desperately waiting for vmware layoffs
Scorch that earth baby!
Easy to answer. They will cut many jobs as Broadcom did it in the past to drastic reduce the operational cost and will sell off parts of the business/technologies like i.e. Horizon. They are very experienced with this way of sizing down - have a look at CA and Symantec. Both are nearly no existent anymore. So better watch out for new opportunities outside.
@1wdv+1lEuJnBw "R&D at 10% of total revenue seems low for a software company"
You'd be surprised how much cr-p growth phase companies shove into 'R&D'. Get's it out of SG&A and creates favorable tax treatment. $MS is a great example of what is more realistic. They're at less than 15% including the investments they're making into Xbox, hardware and scaling Azure.
@1iyh+1lEuJnBw "77% of revenue is expensed to SG&A and R&D." <<<< THIS! The 10Qs tell the story of where the EMT will be looking to optimize.
R&D at 10% of total revenue seems low for a software company - average company spends twice that That said, since VMware will become the new Broadcom Software, perhaps 10% of Broadcom revenue will be closer to the 20% target of revenue for the new software division.
With the rumored spin-off/sell-off of EUC, that would cut the R&D expenditure alone down by at least 1,500 people. Not sure how many R&D folk are in Carbon Black but I would expect that they would be spun off too.
This old thread still seems useful to me for this topic.
https://www.thelayoff.com/t/1gTMqgMW
This has been a super helpful thread.
Does anyone have info on what the Broadcom package looks like for those RIF 2 and beyond?
I know what it looks like for VMware, if I'm cut in the 1st round. But for those kept past Day 0, what does it look like from a Broadcom perspective?
I’m waiting for Magoo’s email on the topic of what to expect.
“Business as usual.”
I’m waiting for Magoo’s email on the topic of what to expect.
🤪
77% of revenue is expensed to SG&A and R&D.
R&D they cut out all the non core dev efforts to bring R&D to 10% of revenue vs. 25% today - so 60%+ cuts in that in the first 6 months. Lots and lots of BU and R&D staff gone - with a big shift from PA to India for those retained and support going to a pray and hope desk somewhere with dial tone...
Sales & Marketing is $4B for majority of revenue in 2000 accounts. That is $2M cost of sale per account which is stupid levels of inefficiency given half the business is zero touch renewals and the rest is repeat sales for the 5th time plus.... Half of that is gone in the first 6 months as JPB cashes his checks into the sunset.... figure 6000 employees gonzo
G&A is $1.1B per year today all to ship the same thing in 4 iterations and across 30K SKU's because everyone is 'special'. That is cut in half day zero as the single contract model is adopted - 2K+ people gone and then the synergies begin to squeeze out more...
Within the first 6 months VMware will likely go from 35K+ employees to less than 25K in a short period of time and then in a year getting to 15-17K max. Only way to drive the cash engine they need to payoff the leverage on the loans and the economics for the deal.
This isn't a tech acquisition, it is a PE / LBO deal just like Dell / Silverlake, only Hock is going to be much more aggressive as he has no fear for his reputation or need to make believe he is a tech magnate like the farce of MD - he is a LBO guy and will strip mine this thing to the core.
Adding a little bit more to @rqo+1lEuJnBw
List 1 never hits Broadcom payroll. They'll be packaged out under whatever severance was defined within VMware. VMware is joining the Broadcom portfolio so expect shared functions between the BUs (sales, finance, marketing) to be quite impacted.
List 2 is the sweet spot for those that want to leave. You'll know your severance package up front, you get a 50% kicker on your pay if you stay the term and whatever equity you have continues to vest.
List 3 gets an RSU grant and is eligible for the annual performance bonus program. R&D staff get more RSUs than general business roles. People joining with below range pay are trued up at transition.
Also everyone gets a Broadcom email. This is the way.
" List 1 is immediately RIF'd; List 2 is RIF'd after transition is complete; List 3 is unaffected."
This is how BC works. Your manager and their manager decide if and how long you will stay. The 2nd group will get a 6 month extension, then another one. From what BC has done in the past.
Doubtful that it will be a Broadcom email address, since the combined company will be branded VMware.
I'm told that 3 lists are already being formed: List 1 is immediately RIF'd; List 2 is RIF'd after transition is complete; List 3 is unaffected.
immediately