...if after all of speculation, stress and anxiety Broadcom decides to keep majority of the workforce on?
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How many people are in the US now? 4000? 5000? How many are tied to the mainframe? I’d say it’s no more than 10% of the US CA workforce.
US headcount could drop 90% and minimally impact the mainframe.
I don't understand thia as many of US employees are actually belongs to MF BU. Its not possible to cut down by 90% with minimal impact on MF. Also I suspect that massive layoffs or transition assignments will happen in India MFBU. It may be possible that Prague will be fully filled with MF engineers.
US headcount could drop 90% and minimally impact the mainframe. That’s the revenue that Broadcom wants anyway.
US headcount can drop 60% and mainframe would be unscathed.
@VL4HDyV-xqm is that $700 mil including carrying costs for the interest on the debt? Doubtful, take a look at the Consolidated Statement of Operations on page 42
https://investor.ca.com/~/media/Files/C/CA-Technologies-IR/documents/annuals-proxies/ca-annual-report-fy18.pdf
For FY’18 CA netted roughly $476 million out of $4.235 billion in revenue.
Assuming a simple interest rate of 5%, that means around $900 million in interest expense. Without cuts this is a $500 million deal in the RED.
And that assumes CA’s revenue doesn’t plunge, which it will.
Broadcom needs to take out close to a billion in costs just to stand still.
Product development and SG&A expense is around $2 billion. Cutting other expenses and integrating CA may save another $100-200 million.
Headcount in the US needs to drop at least 60%, with a corresponding increase in cheaper locations. The math doesn’t lie.
Any divestitures will go against the $18 billion loan, but that will also drop the CA revenue stream.
All signs point to a classic gutting of the business. There is NO “business as usual” successful scenario. Sorry.
Two thoughts... Both hock and covering analysts have shown that if they do nothing this is revenue positive of about 700m a year. Any cuts just add to that.
Imagine the conversation with a large fortune 100 customer.... He's I know we just cost you Mullins because you now need to find new security and ppm solutions, but would you like to buy our hardware anyway?
I don't see that conversation happening.
Oh God, I can only hope that they just let us be. I'm in one of the "doomed" offices supposedly (Islandia), but my product is fairly profitable by a small margin. If Broadcom leaves us as-is it would be like getting a new lease on life.
They have been very straight forward. They are here for CA's client list. If your department is not divested and not directly related to mainframe, say hello to the job market. Either way, everyone will know their fate soon.
wouldn’t it be funny if you haven’t accepted your fate yet?
I wouldn't be shocked either way. Cutting jobs will save money, but they just spent like 18 billion to acquire it. They will need to make money where they can. I wouldn't be surprised if they worked on divesting as much as they can rather than mass layoffs.
not funny it would be sad... this company needs shakeout. too many useless managers/teams/groups that not contributing anything.
If they did their stock would tank. They need to find a billion or so to cut to make the numbers work out.
They need to hack through the bloated ca management structure if they do nothing else
It’s been dragging ca down for years
Honestly... i'd be mad
Not saying it will happen, just thinking how everybody blaring the alarm and creating the tension would feel then.