VMware’s net income rose 14.4 percent in the quarter ending December 31, up to $373 million (£261m).
Advertisement
The job cut announcement was made in VMware’s fourth quarter earnings release, with the company posting $1.87bn revenue for the quarter.
VMware Inc., seeking solid footing after being caught in the middle of the massive Dell Inc.- EMC Corp. merger, said Tuesday it was cutting some 800 positions and EMC’s finance chief would replace a key executive.
VMware, which had almost 19,200 employees at the end of 2015, said it would take a charge of US$55mil to US$65mil (RM233.7mil to RM276.19mil) in the first half of this year related to the job cuts.
The sales slowdown and disappointing bottom-line forecast comes at a bad time for VMware parent company EMC, which is prepping itself for a sale to PC giant Dell. Wall Street analysts were expecting $1.25 per share and revenue of $1.85 billion. VMware has appointed Zane Rowe as the company’s new chief financial officer and executive vice president. Since the Dell deal was announced, VMware’s stock has dropped 40%. Chadwick, who is also VMware’s chief operating officer, will quit the company. Shortly after, investors were spooked again when news that an EMC cloud acquisition would be accounted for as half-owned by VMware, a move that would generate losses for VMware.
Shares declined 2.1% premarket in light trading.
“I look forward to Denis’ continued contributions as we embark on an exciting year ahead, including some of the most significant portfolio enhancements in our company’s history”, said Joe Tucci, chairman and CEO of EMC.
As such, VMware is expected to lay off up to 900 staff as early as this week – representative of around five percent of its 18,000 strong global workforce – in the company’s USA offices.
Clearly theyre going to have to explain whats happening, Abhey Lamba, an analyst at Mizuho Securities USA Inc. Is it something being pressed by Dell and EMC to get costs down?
Advertisement
Can NSX’s expansion also serve to boost growth in VMware’s core server virtualization product? The appointment is made as EMC prepares to complete its previously announced combination with Dell.
