Clip from the article:
Cost cutting is likely to come:
But as part of that consolidation, Tan is likely to slash costs at VMware. After acquiring CA Technologies and Symantec's software business, Broadcom cut significant numbers of jobs at both companies. He's widely expected to follow that same playbook with VMware.
He's likely to find a lot to cut. In Broadcom’s first fiscal quarter, its software division recorded $1.31 billion in operating income on $1.83 billion in sales. By contrast, VMware only posted $783 million in operating income on $3.53 billion in sales.
Based on what Broadcom has done in the past, it will likely cut VMware's marketing and general and administrative expenses by two-thirds, Pierre Ferragu, a financial analyst with New Street Research, wrote in a report this week. Despite Tan's strategy of cutting costs, he's likely to leave VMware's research and development spending alone, Ferragu said.
For their part, Broadcom officials made clear they're likely to follow a path along those lines.
"We have a proven track record of creating shareholder value by applying broad cost discipline and a business model built on significant R&D investment and customer focus," Broadcom software chief Tom Krause said on the call with analysts.
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