VMware has confirmed it has laid off a "limited" number of employees this month in what the company describes as part of its annual workforce rebalancing strategy.
In a prepared statement the company said, "We can confirm that there have been a limited number of changes to our workforce this month. This is a part of regular workforce rebalancing that ensures resources across VMware's global businesses and geographies are aligned with strategic objectives and customer needs. We have an active employee support program to ensure, where possible, impacted employees will be redeployed to open roles within VMware. We continue to recruit in areas of strategic importance for the company."
A company spokesman declined to say exactly how many VMware layoffs are planned, or which groups or geographies within the company were affected. Currently the company has approximately 1,250 openings listed on VMware.com's career page.
In further explaining what rebalancing means, VMware said the action was taken to better align with its most important growth priorities. One such area that senior executives at VMware spoke about over the course of 2019 was a continued focus on helping corporate users deal with the many issues facing them when implementing a multi-cloud strategy. VMware also plans to focus on its cloud partnership with AWS, a significant agreement with AWS that calls for the two companies to work collaboratively on seamlessly melding its hybrid clouds with AWS' public clouds.
VMware characterized the job reductions as workforce rebalancing, verbiage also used historically by IBM in its periodic layoffs. Using the term to describe the VMware layoffs suggests that money freed up by cutting some jobs could be invested in new ones that more closely meet the company's needs.
VMware said it does not foresee any additional layoffs.
Analysts: 'Rebalancing' makes sense for VMware
"There is an opportunity here for VMware," said Keith Townsend, co-founder of The CTO Advisor and a former solutions architect at VMware.
Brian KirschIT architect and instructor, Milwaukee Area Technical College
"VMware has become a portfolio company," Townsend said. "They need a field sales team that can have conversations across the enterprise and not just IT infrastructure. I could see them benefiting by augmenting their workforce with current and former management consultants with a broad view of the enterprise."
Some analysts saw the move as a straightforward response to a strategic shift among many of VMware's corporate users, who are slowly gravitating away from on-premises technologies to the cloud.
"It is partly a normal movement for them at the start of the year, but also part of the balance as more cloud services are gaining in popularity," said Brian Kirsch, an IT architect and instructor at Milwaukee Area Technical College, focusing on the virtualization and storage environments. "So, if this is happening from the customer side it makes sense the same has to happen from the vendor side as they also adjust to the shift in priorities to the cloud."
No word on groups affected by VMware layoffs
While VMware wouldn't comment on what technology groups were most affected, posts from a couple of VMware employees on the TheLayoff.com site said some employees connected with the company's VSAN marketing team were affected, although others posted that no engineers from that group were affected. Some analysts suspect that employees associated with non-cloud products are at the most risk, although this is a problem many other larger companies face as well.
"The biggest challenge all firms have now is how fast technologies are changing compared to a decade ago," said Geoff Woollacott, senior strategy consultant and principal analyst at Technology Business Research. "So, if non-cloud technologies look to be declining and some recent acquisitions have more compelling IP, or the engineering talent can't make the shift to the new stuff, they may have to walk the plank."
While he had no inside knowledge of what groups were affected by the VMware layoffs, one analyst who requested anonymity noted that technical updates to VSAN have slowed the past year or two. He added that the company is likely plowing more money into recent acquisitions that improve on VSAN's capabilities.
"Five years ago, [VMware] was adding feature after feature to VSAN; it was a race to make it more enterprise-ready and they are not done," he said. "But the number of features they need to add now compared to five years ago isn't close to what it was."
VSAN has resided at the heart of the company's hyper-converged infrastructure (HCI) offerings, he added, and remains important to the company over the short term. But as the HCI market matures -- now with only three or four major players competing -- users are turning their focus more toward software-defined data centers and offerings like VSAN could lose mindshare among larger customers.