Broadcom to cut almost 1,300 VMware jobs in California after takeover

By Ian King

Broadcom Inc. plans to fire almost 1,300 VMware Inc. employees in California following the completion of a $61 billion acquisition that pushed the chipmaker deeper into the software industry.

 

The cuts will begin Jan. 26 and affect some 1,267 positions, Broadcom said in a submission to the California Employment Development Department. The jobs are located at VMware’s Palo Alto headquarters, which will remain open. 

The chipmaker is following its usual pattern of eliminating support roles to cut costs in the wake of takeovers. Chief Executive Officer Hock Tan has built one of the biggest companies in the semiconductor industry through a string of deals, which have increasingly focused on software. 

Tan’s strategy, which has boosted profits and won him support from investors, is to identify companies that have strong market share but stunted growth prospects. After purchasing them, he consolidates operations — such as sales, human resources and other support organizations — to cut costs while trying to retain engineering talent.

VMware has become the centerpiece of Tan’s software operations. He previously built up the division by purchasing CA Technologies and Symantec Corp.’s corporate security business. 

VMware, founded in 1998, pioneered virtualization programs, which allow software to make more efficient use of server computers. The company had about 38,300 employees prior to the closing of the transaction, according to data compiled by Bloomberg.

Broadcom, whose other operations include making chips used by companies including Apple Inc. and Alphabet Inc.’s Google, will report earnings next week.

The San Francisco Chronicle previously reported that Broadcom would cut more than 1,200 workers.