Virtualization News

‘Why Aren’t We Staying The Course?’ VMware Takes On Employee Worries

O’Ryan Johnson

In an internal FAQ, VMware explained why it agreed to the Broadcom acquisition and said it can’t guarantee employees will still have a job once the $61 billion merger is complete.

VMware Answers Employee Questions

VMware says it is still hiring and has no plans to change its recruitment efforts going forward, even as the company tells employees it can’t guarantee they will still have a job once a $61 billion merger with Broadcom is complete.

There is one caveat: check with legal before hiring a new vice president.

“While we cannot speak for Broadcom, our hiring plans, which are based on our operating plans and workforce needs, continue,” VMware said in a lengthy frequently asked questions (FAQs) document it filed with the U.S. Securities and Exchange Commission last week. “Consistent with current practice, our hiring plans continue to be the result of our operating plans and workforce needs in partnership with our finance and talent acquisition teams. However, prior to beginning a hiring process for any individual that will have a title of vice president or above, please consult with legal.”

Broadcom CEO Hock Tan has talked publicly about the need to adjust the company’s revenue model, and has published slides that show Broadcom wants to increase the software company’s profitability. Jeff Ready, CEO of VMware competitor Scale Computer, has said the only way to accomplish the profitability that Tan is projecting is through layoffs.

However, the internal FAQ that VMware filed as part of its disclosure requirements with the SEC shows the firm is proceeding as normal with hiring, travel, and expenses under the operational plan it had prior to the deal’s announcement.

In addition to questions about hiring and layoffs, VMware told employees why it had abandoned its plans to go it alone, saying it received an offer in May from Broadcom that enriches shareholders at a premium the VMware board could not ignore.

“We received an unsolicited proposal to buy the company at a substantial premium,” the company wrote. “The VMware board of directors assessed the proposal and determined it would be in the best interest of shareholders to accept the offer, including a ‘go-shop’ provision under which VMware and its Board of Directors may actively solicit, receive, evaluate and potentially enter negotiations with parties that offer alternative proposals during a 40-day period following the execution date of the definitive agreement.”

Here are a dozen of the asked and answered questions that VMware provided to managers to answer employees questions: