Broadcom restructures VMware into four divisions after closing $61B acquisition
Broadcom Inc. has reorganized VMware into four divisions that are each responsible for a different subset of the virtualization giant’s products. This reorganization led to significant VMware layoffs, with Broadcom cutting at least 2,800 jobs.
The Register reported the move this morning, citing new information that was quietly added to Broadcom’s website. The chipmaker later confirmed the reorganization in a statement. In conjunction with the changes, VMware Chief Executive Officer Raghu Raghuram is leaving the company.
The news of VMware’s updated organizational structure comes less than a day after Broadcom officially completed its $61 billion acquisition of the virtualization giant. When the companies first announced the deal last May, they stated that it would close it by Feb. 23, 2023. Broadcom pushed back the deadline three times, extending the acquisition process by 90 days on each occasion, to address concerns raised by antitrust regulators.
The first of the four new divisions into which Broadcom has reorganized VMware focuses on the virtualization giant’s Tanzu platform. Originally introduced in 2021, the platform is designed to help enterprises build and maintain container applications. The unit is led by Purnima Padmanabhan.
The second new VMware unit is dedicated to commercializing VMware Cloud Foundation. It’s a software suite that includes Tanzu, as well as a range of other products including the company’s flagship vSphere hypervisor and NXS network management platform. The Cloud Foundation unit is led by Krish Prasad.
The two other divisions Broadcom has created are known as the application networking and security, or ANS, and software-defined edge units. They’re headed by Umesh Mahajan and Sanjay Uppal, respectively. Broadcom didn’t specify exactly which products the two units will offer.
The reorganization coincides with the departure of Raghuram, who led the company from June 2021 until the completion of its acquisition by Broadcom this week. He was previously the executive vice president and chief operating officer of VMware’s products and cloud services group. Raghuram joined the virtualization giant in 2003.
Broadcom has set a goal of more than doubling VMware’s EBITDA, or earnings before interest, taxes, depreciation and amortization, to $8.5 billion within three years of the acquisition’s completion. One way the chipmaker can go about the task is by cutting costs, which could involve layoffs. In September, VMware executives reportedly confirmed to employees that job cuts are on the table.
In a Wednesday blog post marking the acquisition’s completion, Broadcom CEO Hock Tan stressed that the chipmaker will “invest significantly each year to advance VMware’s innovation and customer value.” Half of that investment is set to go towards product development initiatives. The remainder will “help accelerate the deployment of solutions through VMware and partner professional services,” Tan detailed.
The executive indicated that Broadcom’s investment strategy will place a particular emphasis on VMware’s Cloud Foundation platform. “Broadcom’s focus moving forward is to enable enterprise customers to create and modernize their private and hybrid cloud environments,” Tan wrote. “At the core, Broadcom will invest in VMware Cloud Foundation, the software stack that serves as the foundation of private and hybrid clouds.”
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