Market Data 
- Broadcom has cut VMware’s workforce by roughly half since acquiring the company in 2023.
- VMware had more than 38,000 employees in early 2023. That’s down to about 16,000, two sources said.
- Wall Street loves CEO Hock Tan’s M&A playbook.
Broadcom’s aggressive cost-cutting strategy has at least halved VMware’s workforce while pleasing Wall Street analysts.
The chip giant closed one of the biggest tech deals ever when it acquired cloud software provider VMware in late 2023. Since closing the acquisition, Broadcom CEO Hock Tan has focused on making the subsidiary more profitable.
Broadcom has been cutting jobs in the past year, including cuts to VMware’s salesforce in October and to its professional services team last week, according to current and former employees and LinkedIn posts. In addition, Broadcom has reduced the workforce in other business units or offices over the past few months.
VMware stated that it had more than 38,000 employees as of February 2023, according to a regulatory filing, though many employees and executives departed before the deal closed. Attrition has also contributed to the shrinking workforce.
By this January, VMware had around 16,000 employees, according to two sources. Employees in marketing, partnerships, and VMware Cloud Foundation have been let go over the past few months, according to former staff and LinkedIn posts.
Broadcom has implemented other workplace changes at VMware, such as requiring employees to return to the office. In cases where not enough employees badged into certain offices, Broadcom has shut down those locations and cut staff there, one former employee said. Broadcom did not respond to a request for comment last week.
Tan has concentrated on VMware’s largest customers and switched to a subscription-based business model from a perpetual license approach. He said on Thursday’s earnings call that 60% of customers had so far been converted.
The company also raised prices. VMware customers have said they’ve faced massive hikes due to product bundling, which means multiple products are packaged together and customers have to pay for them all.
“The VMware kicker”
Broadcom’s stock has climbed about 40% in the past year. In December, Broadcom’s market cap hit $1 trillion.
Analysts have largely been pleased by Broadcom’s handling of the merger integration.
“The VMware kicker continues to execute, which shouldn’t be a surprise, given Hock Tan’s expertise on his wash, rinse, and repeat M&A playbook,” said Dave Wagner, portfolio manager at Aptus Capital Advisors, ahead of Thursday’s blockbuster earnings release.
William Blair analysts called VMware the “star in software,” saying it was an “opportunity for Broadcom to drive sustained software growth and potentially reduce the impact of heightened customer churn going into 2027.”
Following the acquisition, Broadcom made steep job cuts and consolidated teams at VMware, as BI previously reported. Broadcom had cut at least 2,000 employees around that time.
Broadcom also divested some business units, such as End-User Computing.
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