VMware Reportedly Laying Off 5 Percent of Its Workforce

Virtualization giant VMware is getting ready to announce layoffs even as Dell and EMC, which owns 80 percent of VMware, jump through hoops to make their $67 billion merger a reality.

Fortune is reporting VMware will cut up to 900 employees, which is about 5 percent of its global workforce, this week. VMware could not immediately be reached for comment, but some are speculating the layoffs may be related to the impending merger.

EMC plans to shave $850 million from its budget by cutting an unstated number of jobs, according to a regulatory filing at the end of last year. Most of the job cuts should be completed by the end of the first quarter and wrapped up by the end of the year. Some industry watchers believe the VMware cuts are a natural progression.

If the Dell-EMC deal announced in October goes through, it will be the largest technology merger in industry history. Immediately after the ink dries on the mega deal, the combined company will stand as a leader in the $2 trillion information technology market and tap into synergies in high-growth areas such as digital transformation, software-defined data center, hybrid cloud, converged infrastructure, mobile, and security.

The Business Is Changing

Fortune columnist Barb Darrow said that the changes ?EU?emanate from the difficulty Dell and EMC have had getting investors, especially VMware investors, to swallow this deal.?EU? However, Zeus Kerravala, principal analyst at ZK Research, who has been watching the merger details unfold, told us he?EU?s not sure the merger is behind the VMware layoffs.

?EU?Obviously the global markets are a little soft right now. Almost every large tech vendor seems to be struggling. And there are currency issues,?EU? Kerravala said.

Additionally, VMware?EU?s core virtualization business has slowed down, he said. "A lot of people think VMware?EU?s product has become somewhat of...

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