Thread regarding VMware layoffs

"However, here is something a lot of folks don’t realize about EUC. It’s been undermanned for several years."

And that's for a good reason. EUC has a relatively small market share compared to the dominant competitors (Microsoft and Citrix). That is why VMW leadership chose not to invest in a BU that focuses on a declining market opportunity within legacy software.

There's no incentive for an informed buyer to invest in product enhancement. Just harvest the customer installed base for as long as CIOs tolerate the poor support.

“ Private equity buyers will want AVGO to assume the cost of those headcount cuts before a deal is made. So, expect those layoffs to be scheduled by AVGO in the coming weeks or months. All VMware BUs had way too many people, so more cuts are unavoidable.”

You’re correct about VMware’s BUs having too many people. Simply put, VMware had too many BUs to begin with. The collapse of those BUs is one of the drivers for savings. It should also reduce the number of sales and marketing people involved in the transaction, resulting in fewer commissions paid.

However, here is something a lot of folks don’t realize about EUC. It’s been undermanned for several years. It’s already a lean operations. There will be expansion of EUC needed for it to be a stand alone company. What happens after the divestment is completed is really up to whoever buys them (assuming they don’t just stand as an independent). Also, EUC has been a piggy bank for the core for several years. That has hindered investment in EUC’s product portfolio. That piggy bank is now closed.

Something tells me that BC makes gradual layoffs in order to hide the overall sheer magnitude of the eventual layoffs- which is a bad look. We all know that eventually 10's of 1000's will be let go. The public doesn't see this if they do so by spreading it out.

"Don't forget that CB and EUC will be sold off, this will reduce some headcount without a need for layoffs."

Private equity buyers will want AVGO to assume the cost of those headcount cuts before a deal is made. So, expect those layoffs to be scheduled by AVGO in the coming weeks or months. All VMware BUs had way too many people, so more cuts are unavoidable.

Don't forget that CB and EUC will be sold off, this will reduce some headcount without a need for layoffs.

Office closure-related cost-savings will take longer to realize due to the contracted lease term for each location. AVGO will need to calculate if paying an early termination fee is preferable to waiting for a building lease to expire.

Perhaps the important metric to follow is not 'how many', but 'when' will the headcount reductions be scheduled to reach the desired AVGO cost-cutting goal.

The Profitability Challenge for Broadcom Software will be clear once they report the severance write-downs on their balance sheet and inform shareholders of the impact.

Many senior software engineers and other skilled employees declined offers which will significantly increase the severance charge that was originally anticipated. Therefore, we'll need to monitor the AVGO quarterly reports to get an accurate assessment of the combined total over time.

In the US, overhead per employee is more $250k per year rather than $175k