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VMware Employees Ask ‘Why Should I Stay?’ Amid Broadcom Takeover

VMware Chief People Officer Betsy Sutter told employees at a Town Hall last week that there was a ‘huge opportunity for us’ and addressed other issues on employees’ minds, including remote work, to which she said, ‘Those conversations with Broadcom have not begun.’

VMware’s 35,000 employees demanded to know why they should stay at the software giant after news broke last week that their leadership had signed a deal to be acquired for $61 billion by chipmaker Broadcom.

VMware CEO Raghu Raghuram, Board Chairman Michael Dell and other executives hosted an online Town Hall for employees on May 27 where they addressed questions from employees while trumpeting the benefits of the deal for shareholders.

“The questions that we’re seeing obviously on chat and I think on everybody’s minds, the question of why should I stay if I’m a VMware employee and what are you seeing as cultural synergies on your, you know, early, early discovery?,” the moderator asked Chief People Officer Betsy Sutter, according to a transcript of the meeting.

Sutter told workers that “there’s huge opportunities for us there.”

[Related: Broadcom’s VMware Acquisition: 5 Key Customer And Cost Figures To Know]

“I think it’s quite exciting that Broadcom wants to create a software division, a software franchise and I think there’s huge opportunities for us there, obviously,” she said. “The conversations that I’ve had to date with Broadcom, they are very interested in all things employee. They are very interested in our talent.”

What Broadcom Has Agreed To Continuing VMware Empoyees

In Section 7.7 of its takeover bid, Broadcom has agreed to give “continuing employees”—those who remain after the acquisition—“at least the same wage rate, or base salary.” It will also honor existing language around incentive pay, including cash and equity. Health, welfare and severance benefits that are “no less favorable” than the employee currently has will also be provided.

In a slide it published last week to investors titled “Multiple Levers To Increase VMware’s Profitability” Broadcom said it will increase VMware’s profitability by 80 percent, from $4.5 billion last year to $8.5 billion in the future.

The company has said its plan to get there includes targeting efficiencies in sales and marketing as well as a plan to “eliminate duplicative administrative functions” across “IT, finance, legal, human resources and facilities,” which could indicate potential layoffs ahead.

VMware employees wanted to know about remote work as well, but Sutter had no assurances.

“The chat is blowing up on work-from-home; I’ve never seen it move that quickly,” Sutter said. “You know, our commitment to a distributed workforce and standing up a distributed workforce model with choice and flexibility at the core remains. Those conversations with Broadcom have not begun.”

Broadcom To Decide Who Remains

Broadcom will have final say on who stays and goes according to the terms of the deal, but Raghuram said all VMware employees made this $61 billion deal possible with the value they have created for shareholders. He encouraged them to be proud of their efforts.

“This acquisition offer from Broadcom would not have happened without the unbelievable amount of work and value all of you have created,” he said. “I alluded to this in my note that I sent out to everyone—even though the headline says $70 billion, if you really look at what we’ve contributed to the world, it’s an unbelievable amount of value. And all of you should feel very, very, very proud of the value you’ve created and the value that you’re creating every day. And I sincerely, sincerely appreciate all of the incredible amount of work that all of you are doing.”

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