Growing sense that deal is blocked... Will layoffs happen?
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Its not some savior from Hock Tan. Its just a different devil.
This person knows business. No deal; different devil. It’s all about MD and Silver Lake as it’s been since day 1. They need/want pay day. If it’s not BC they will unload to someone else for less and still result will be the same just more drawn out and actually more painful.
Of course they will happen and BIG time
As of February there were 38,300 employees. Pre pandemic it was 31,000. So to get to pre pandemic levels there needs to be 10 to 20% trimming
Do we know how many people currently VMware has? Or at least how many less we are comparing to last year? Because my impression is that many left but there were a lot of hirings as well (at least in the first 6 months post-acquisition news but maybe not too many in the last 6 months)
someone even worse than BC, like one of those investment firms that buys something and breaks it all up to sell the pieces
Broadcom IS one of those firms! They exactly intended to do just that. Cut all the fat, remove all the meat, move on.
The real question is, will any company even be allowed to buy us? I fear that if the merger is rejected, few companies will take the yearlong, multi-billion dollar risk of acquiring us.
The UK's CMA does not seem to be in a permissive mood.
People keep leaving and not replaced, and still VMware continues operating well, business-as-usual. This proves how bloated the company is with duplication/triplication of roles across the organization.
VPs and Senior Directors already worked out the in/out staff names lists for Broadcom. This data will be repurposed for RIF action if the deal does not go through.
Who knows? Its all speculation at this point. Fully half of my team- myself included- have left since the acquisition announcement and nobody was replaced. If that is a similar scenario across the company then a lot of folks have already left and so perhaps the company isn't as bloated as it was. MD will obviously want to find someone else to buy the company and who knows? In this economic environment that could mean someone even worse than BC, like one of those investment firms that buys something and breaks it all up to sell the pieces aka- Jack Welsh style.
It's more likely to be AIBU so we can show we have AI products too.
If the deal fails, it is good news for employees. MD and SL will be very unhappy and they will immediately look for another buyer. There won't be any knee-jerk reactions from leadership and Raghu will stay CEO. There will be the usual layoffs around January. Life will go on. If you understand our revenue streams and our customer base, you will have no doubts about this. And oh, we'll start acquiring startups again to create another BU.
You, Sir/Madam/Other, are correct in your analysis, IMHO. Sage advise. Thank you!
I also believe we can realistically go to around 70$. We were at 96$ when US interest rate was much lower and before the stock market really corrected. At that time earnings were higher too and after more than 1 here that we basically don't have any plans for the future as we depended on the acquisitions I think we will be punished hard by the market. Personally I will start to divest part (but not all) of my RSU and stock I accumulated with ESPP over the years and invest the money in diversified stock ETFs and bonds. The fact is that if everything's go well stocks can increase of 20% if everything go bad I can also loose even 50% at this point, better to reduce risk
VMware’s PE ratio is 40. Way out of whack. Corrections will happen, $70 seems reasonable.
buy this steaming pile of virtuality for .50 cents on the dollar
"Based on the closing price of Broadcom common stock on May 25, 2022, the total $138.23 per-share consideration represents a 44% premium to the closing price of VMware common stock on May 20, 2022"
I doubt any company will offer to buy VMW at a 44% premium again.
And BTW, VMW was at $96 when the deal was announced. It's reasonable to believe VMW will be back there if the deal falls through.
I’d bet VMware will keep CB if the deal doesn’t go through because all mgmt is capable of is keeping the status quo.
They will find some new word salad to explain their new strategy that is the same ineffectual strategy at before but now with more croutons, extra crunchy!
Dell and Silver Lake will let the status quo roll so as to “preserve” the asset. Then they go back to those companies that put in lower acquisitions bids earlier and ask if they will want to buy this steaming pile of virtuality for .50 cents on the dollar. They will call it a victory for the shareholders - all 2 of them.
Wonder if Carbon Black will be spun off if the deal is blocked? Its being treated very differently this FY.
Is that HR on this thread
Either way, if you are a redundant role, or under producer - get your affairs in order..
VMware layoffs would probably be closer to what other techs are doing which is around 10%. Broadcom would be massive massive layoffs. So we’re better off without a deal. Ir sucks if you own a lot of shares but there’s still time to dump some and park it somewhere safer for now.
No cost is too high for DEI!
Doing massive cuts is a wonderful opportunity for the DEI team to make the ethnic
makeup of every group in VMware exactly match the ethnic makeup of the US
> population. Could be the best thing ever!
It would be, but not going to happen, for at least 2 reasons:
-
A company doing massive cuts is highly sensitive to costs. Domestic labor
is more expensive than laborers from abroad. -
People making decisions have demonstrated hiring from
the subcontinent preferentially for years.
If you can hire like that, why not fire like that!
Doing massive cuts is a wonderful opportunity for the DEI team to make the ethnic makeup of every group in VMware exactly match the ethnic makeup of the US population. Could be the best thing ever!
"consider yourself extremely 10lucky if you get retained by Broadcom or don't get on the chopping block of VMW."
Sorry, consider myself extremely 10lucky to not get cut? The first round of layoffs will be 25% max. Do you think it takes extreme 10luck to not survive the first round of cuts? You are overstating your case.
Layoffs will happen with or without a deal. If there is NO deal then VMW will do the layoffs. If there IS a deal then Broadcom will do the layoffs. In either case expect to NOT have a job in the fall and consider yourself extremely 10lucky if you get retained by Broadcom or don't get on the chopping block of VMW.
Yes. From an equity perspective, you're betting on whether of not this deal will happen. That's it. Plain and simple. At ~$125, you may consider taking your share off the table as that's actually the lower end of the target price should this deal finalize. You will not be the first to hear if this deals fails, and most likely will join a community of bag-holders. Caveat emptor
Michael Dell will look for a new buyer. New buyer will offer less for us.
VMware stock currently holds a P/E of 45. Microsoft has 32, Apple just below 30, Alphabet 25. If the deal fails I can't realistically see how it can have a P/E of more than 20. This means stock can even go down 50% or more. Layoff will need to happen in order to increase earnings again of at least 1B to increase P/E and bring stock price to an fair level.
@OP+1msL9uOO why do you think the deal will be blocked?
Of course. Our stock value shot up and stayed after it was announced and that was last MAY. we havent seen the hit others have and haven't had to make any cuts like everyone else in the tech world
Lets say the deal is completely blocked.
Day 1 stock plumets. We were at 90 about the time of the announcement, we would fall below that, my guess into the 70s with a slight rebound into the low 80s if we are lucky.
Day 2 scramble happens. This will go on for a couple of weeks with every VP and above saying "don't worry, all is well"
Day 3-45 A cr-ppy time for us will being with cuts, but not broadcom deep. This will be the existing exec team trying to save their butts.
Day 45+ a new CEO is installed. New mgmt follows. Cuts start to look closer to broadcom cuts, but we happily keep the DEI folks, well because...
So you wind up in a few months with the same cuts and reductions but with a stock price that may be down 40 or more % hard to hire into. Anyone with RSUs that needed that 50K now gets less than 30....
Its not some savior from Hock Tan. Its just a different devil.
yes.
yes