Broadcom to Cut Almost 1,300 VMware Jobs in California After Takeover | Hacker News Reader

Broadcom to Cut Almost 1,300 VMware Jobs in California After Takeover

bloomberg.com

218 pointstoomuchtodo125 comments

Could someone who understands the situation better explain .. what are the business synergies between Broadcom and VMware? Is there any business overlap at all..?

Maybe buying and laying off is a profitable move, but I'd expect it to be done by investment firms that specialize in that. It'd be a bizarre financial gamble for a chip company. So there must be some angle where this makes sense for them and not for anyone else

Broadcom/Avago is more of a corporate raiding company than anything else at this point. They took the name of one of their victims to hide it a bit.

So like Hannibal Lechter

This feels like a fuckup. The acquisition should have been blocked for the same reason Nov 2017 takeover of Qualcomm was blocked.

Most long term Broadcom people I know are pretty happy with Hock Tan’s leadership.

It’s not that different from software focused private equity shops like Thoma Bravo. Buy a software company, starve it of resources, and price just below each clients BATNA. Revenue may decline over time, but costs fall faster and the buyer harvests that premium. There’s no synergies, just a willingness to be more ruthless and give fewer shits.

Edit: clarity

you forgot the classic move of "release the legal team to sue anyone doing anything vaguely similar to your patents"

Yes! And aggressively enforce your software license agreements with frequent audits.

Anything to make money other than innovating and actually building better products.

They’ve run out of chip companies to buy, so they have to figure out how to buy software companies. This is a little bit speculative but I believe they’re substantially interested in VMware’s capability to buy and integrate other software companies.

50% of Broadcom's revenue comes from Enterprise SaaS. They already have an APM play (CA Technologies), EPP play (Symantec Enterprise), and Data Security play (Symantec Enterprise). By acquiring VMWare, they can add a Private Cloud and Network Security play.

All these plays converge into allowing a company to buy their entire Enterprise Infra stack from Broadcom.

CA Tec, Symantec and now vmware - sounds like a combo of failed software companies which are no longer competitive and exclusively cater to boomer enterprise companies and close b2b deals with heavy bribes and quid pro quos

The whole point of a business is to make money. That's it. By catering to "boomer enterprise companies" also known as FORTUNE 1000 you can make billions a quarter.

Jesus HNers are dense.

No, the point of a business is to create good products. Making money is just the mechanism we've chosen to encourage people to do that, but the justification for capitalism has always been that it creates "the best products for the lowest cost". Only caring about making money, to the detriment of creating the best products for the lowest cost, is a perversion of the system, and we don't need to tolerate it.

old VMWare used to cater to boomer enterprise companies and thats how they sold their products.

These new owners however are not interested in catering to customers' needs - they just want to milk license fees like Oracle and outsource as much product development and customer support overseas as possible.

with predictable outcomes obviously

VMWare had a plenty of relatively low value sales motions such as channel sales, Mid-Market, SLED, and APAC.

By only concentrating on direct sales and renewals for F100, you will still have around 80% of the same sales revenue as before, but at a lower operational cost.

This is the same operating model that ZScaler, Crowdstrike, and PANW use.

Sometimes, that dollar on the ground simply isn't worth picking.

And ime, there's a reason why most VCs, PEs, and Sales Leadership are strongly opposed to companies and startups that target a Channel Sales GTM strategy.

Channel sales GTM strategy? Mind at least expanding GTM?

Anybody in charge of making purchase decisions for Enterprise SaaS and going for a full-Broadcom stack should be fired.

Instead of being promoted and moving on, claiming it as a victory evermore

None. It’s a slumlord scenario. Buy it and milk as much cash as possible. VMWare has a decade to coast into oblivion.

It doesn't really seem like Broadcom has an overall plan. We used a load balancer, briefly owned by Broadcom, but for some reason they didn't want it and sold it to PulseSecure. Had they kept it they could have build something where they would provide an easy load balancer integration for VMware, but I don't believe that how Broadcom thinks.

Better Broadcom network drivers for VMware?

There's a lot of potential synergies, like tailoring network card to VMware, adapting their APM to enable for VMs easily. Storage solution optimized for VMware. I just don't believe that they think in those lines, or maybe they do when they want to justify their purchases, but then never follow up.

Overall I think it's weird that VMware has such a hard time existing as an independent company. They are pretty dominant in their field which very little competition. Most companies I've dealt with run VMware for at least part of their business. I see this as being just as much a failure of VMware management to run a successful near-monopoly.

> maybe they do when they want to justify their purchases

It's this. They are very strategic about where they invest money. If they can get around a 20x RoI they will build it. If they can't they'll shut downt the division.

This is all Avago. They bought Broadcom, eviscerated America's #2 communications chip company, and renamed Avago Broadcom to hide their crimes against humanity ...

On the eve of the US' favorite war criminal finally dying could we please not inflate our words. Corporate raiding is not nice but crimes against humanity?

Eviscerating one of the last bastions of chipmaking know-how en nosotros estados unidos is not really something one can under-sell.

They liberated us. Before Avago they were throwing good money after bad.

kKR and Silver Lake (both private equity firms) created Avago.

Avago rolled up several companies including Broadcom and are 86% institution owned (Vanguard and Blackrock top 2)

Most of the layoff are marketing and sales as well as some engineering (it is a cut monthly cost and reap the revenue flow acquisition).

A slim chance of Avago/Broadcom utilizing its full enterprise SaaS hardware/software stack as I suspect it was just for "prospective show" in getting the acquisitee companies to be suckered in into the acquisition deal.

Broadcom lays off many VMware employees after closing acquisition - https://news.ycombinator.com/item?id=38436419 - Nov 27th, 2023 (208 comments)

I continue to find it vexing that these articles don’t include whether this is news to the employees involved. The transitional offers were, I have heard, pretty good.

This is not news to employees. Most U.S. employees knew if they were continuing with Broadcom before the deal even closed.

Bloodcom is ruthless. Wonder what the severance package is like

Oh gee this makes me feel good as a VMWare user... :}

What I mean is... Motherfucker...

as a person who really likes workstation i imagine that i'm pretty screwed now.

Yep, I do my development almost entirely within a Linux VM on a Windows laptop. Workstation already feels kinda neglected (lack of support for distinguishing between P and E cores is one recent unresolved pain point), so all of this is really putting me on edge.

WSL2 works great for me, you should check it out

Disk performance can be a problem under WSL2, I ended up switching to Workstations after running into this issue: https://github.com/microsoft/WSL/issues/4197

Seems to more of a Defender issue than a WSL one, see https://github.com/microsoft/WSL/issues/8995

After adding exclusions for the fsnotifier-wsl process and and both variants of the WSL distro path my disk performance was improved.

Adding the idea64.exe process also helped since I was trying to run IntelliJ against projects inside WSL.

Is there a reason not to just install Linux (and dual boot into windows if you need it for some things)?

I suppose if it’s a work laptop they might not be too pleased with this.

Seems like Linux laptops are generally not known for their great battery life. Would certainly be an issue for many laptop users.

It's a pain in the ass to set up sometimes, but you can pretty much always get better battery life in Linux nowadays. Even with hybrid graphics laptops.

i have never got better battery life on linux with every power savibg tweak under the sun, on system76 laptops. its still awful

a bit off topic, but do you know of any good resources on tuning battery life and CPU fan control for system76 laptop?

Then I would have to reboot all the time to switch back and forth. And hardware acceleration is better on Windows, so I usually have web browsing, music, videos, messaging, etc, running on Windows on one monitor or virtual desktop while my terminal is open in the Linux VM on another. Like another commenter mentioned, power management on Windows is still better, too.

If you're on Windows and need a VM, why not use Hyper-V? I haven't touched anything from VMWare in decades, so I'm genuinely curious.

VMWare has the best virtual graphics performance IMHO. Hyper-V or Virtualbox is just painful in comparison. Until graphic vendors support partitioning GPU resources to allow sharing the main GPU to a VM using passthrough, it will likely remain one of the best options for many.

Yep, this is the exact reason. I started on Virtualbox but jumped over to VMWare because the graphics virtualization was too broken under Virtualbox to do testing for web browser development (I was interning at Mozilla at the time).

I'd say you've been screwed for a while already.

Its true but I've been able to lie to myself up until now

The theory is "we already have a finance, S&M, admin etc" so we will dump the other one wot we just bought. That will instantly fix up the PandL and BS and the share price will simply head north because we have dumped duplicated cost sinks. Loverly

Obviously, we won't bother to compare functions and functionality now 'coz ours will be the better one, 'cos its ours.

Broadcom seem to be a firm of breakers, shakers and dumpers.

So is VMware. Not as severely so, but they took apart a bunch of systems in Pivotal because they already had one. Never mind that Pivotal’s version worked and VMware’s didn’t.

Especially amusing (in hindsight) in the case of provisioning test VSphere clusters.

As far back as May they were already figuring out which teams would eat each other up.

More like fire expensive developers and hire cheaper somewhere else

Any news on the locations of the cuts? It looks like VMware is mostly in the Bay Area.

“The jobs are located at VMware’s Palo Alto headquarters, which will remain open.”

Broadcom is moving their official HQ to the former VMware campus in Palo Alto. It's actually a pretty large and amazing campus.

This article is only about California, but people were laid off everywhere. Source: I'm one of them and am in Oregon.

Sorry to hear that - hope you land on your feet.

Thank you! It's all good.

1/2 of all Australian employees are getting made redundant, and it looks like 100% of new Zealand employees are out. Several office locations in Oceania are gone.

What does this mean for the future of the product?

I guess Spring is also affected.

What is the reduction in Bulgaria?

any news on what happens to the saltstack side of the vmware operation?

Hey proxmox, maybe get off your a$$ and put out a good multidatacenter management product so that I can transfer vms/manager resources between my clusters? It's one of the few features that keeps part of my operation on vmware instead of on your product.

I proxmox

I like turtles.

Proxmox already has clusters that allows you to live migrate VMs between nodes.

Yes I am aware. That uses corosync and is fine if you are running a few servers in one location with large data pipes between them. That is only part of what is needed to compete with vmware (and xcpng/xen orchestra for that matter). The missing piece is the management software to tie multiple clusters together across different physical locations for administration and (ideally live) vm migration.

In the age of containers, what are you seeing net new VM provisioning for?

You act has if windows does not exist. My company and most of the companies I know run on windows server for line of business functions which are one prem when run on VMware

Contaniers and Linux may run the cloud but at least in the US Microsoft owns on prem workload for every day business functions

For every Linux server I manage there is about 30 or 40 Windows servers

How’s that market doing? Growing much?

Outside of web development and web-based servers Yes it's growing just fine

There's no doubt that Linux owns the web but for everything else there's a crap ton of legacy business software line of business apps databases file servers and tons of other things that run on Windows server

You don’t need to just make things up and then scold others like they were idiots who are stuck in a bubble.

Growth is non existent and has actually gone down every year since 2008 according to Google Trends data.

https://trends.google.com/trends/explore?hl=en-US&tz=0&date=...

First time I hear somebody saying that Windows servers being used more in the enterprise is a made up statement LOL

Google search trend isn't directly linked to marketshare

I said it wasn’t growing and hasn’t been for over a decade and a half. If you have stats proving otherwise feel free to provide.

All of those trends are based on WEB SERVERS, as is every other online metric you will find.

I can not provide you an Install count stat, i am sure someone deep inside Microsoft knows that number, but windows servers are used in non-public facing workloads. Not on the Internet.

that deviation happened years ago.

However since we are talking about vmWare which is also using mostly in non-internet facing workloads then it is relevant.

I have some 20 years of experience as a system administrator on internal IT Teams, I don't support cloud apps, I do not develop cloud apps, i dont do DevOps, the only "cloud" companies like mine use is Office 365. I work exclusive on supporting internal workloads for companies in the Manufacturing / Industrial market segments

For industries like mine windows is the dominate server platform, most of our software vendors require it, often also requiring SQL Server. Hell I have multimillion dollar pieces of equipment that come in with Windows 10 has system they are using to control them.

Out side of the Web, linux is a minor player

You kind of started off by saying that Google trends data only represents web servers which is entirely incorrect and has no relationship with how Google trends works or what that chart represents.

So I don’t really know how else to respond to this… it also relies on a secret magic number that nobody can see that shows the real truth so it’s kind of a silly argument.

If windows server usage is growing surely there must be a lot of compelling evidence to back it up?

What is the windows marketshare in servers? I haven’t encountered a single one in the last 15 years

Then you only work in your niche market or don't work in system administration of any company of any size

You must work in a very niche market, in my last 25 years, 100% of the company I worked for were primarly based on windows servers. Yes there are linux servers and the number is increasing, but still represents a very small percentage compared to windows server.

Where I'm at, it's applications that teams don't want to spend time moving to containers, or they claim the app runs better on dedicated VMs, and in other cases they just aren't ready to move yet and still need to add capacity until that time comes. Even teams that are utilizing containers heavily in some areas are still building hundreds of VMs for other parts of the app.

Containers first might be fine for a net new application. But if something is already 10-20 years old, that isn't going to change overnight. I think it would take something drastic for us to get off VMs completely, even if I'm looking 5-10 years out.

Check out KubeVirt, you can mix containers with VMs.

Interesting question. Before anything else, we need some basic services like dns, mail, git, etc. How do you suggest deploying these in a on-prem/selfhosted environment? I assume not on Kubernetes or the like as that could cause chick-and-egg issues?

Each service should be high-available also. For dns & smtp quite possible, and gitlab seems to support high availability too https://docs.gitlab.com/ee/administration/reference_architec...

Have you even seen a complete container-based infrastructure on top of bare-metal without any VM?

Its this. Domain controller, dns, nessus scanner to start at every office site. Next up legacy csttom windows apps. Maybe i could add a lot of complexity and throw those in kubevirt but there isnt a massive benefit when my work load looks like so very many other medium sized non software businesses:3-10 vms per site across 3-20 sites handles our entire workload when combined with o365 for business

Instead of leveraged buyouts, we now have layoff buyouts. Acquire firm, minimise headcount, keep lagged revenue on existing assets and IP for 5 years while reaping profits on 90% margins.

Sometimes it’s right to give up on the dream /s

Same as: acquire renown company making a solid product, substitute product by something from China at a fraction of quality/cost, still charge the same for the next couple years until word has spread.

Examples?

Kodak Print for one. Kodak Print was spun off into a holding company called Kodak Alaris who then sold it to a Chinese investment firm who aren't doing anything with it other than constantly increasing prices to squeeze hospitals and university labs.

Pyrex is notorious for this. The whole brand used to be about it being borosilicate glass, but they substituted it for standard glass which - surprise - shatters under thermal stress.

This is so frustrating - Pyrex isn't itself anymore. Is there any brand that still sells kitchen glassware made like Pyrex used to be?

The company that licensed Pyrex in Japan still makes and sells the real deal as Iwaki

Oxo is borosilicate glass.

We've also noticed that the top of our pyrex containers flake off shards of glass. We buy Anchor now, and it seems better.

Afaik, There's actually Pyrex and PYREX. The latter being European and still making them properly.

Craftsman tools

if you're talking about hand tools, they've always been average quality at best. The real advantage has been the warranty, which from what I understand is still honored.

Craftsman power tools are absolute joke and might as well have a fisher price logo on them.

the replacement ratchet I got from craftsman (lowes) to replace my small (1/4?) drive for free is much much better than the one i bought originally in 2010.

Craftsman is interesting because its been there and back again

Sharp TVs

The vast majority of the HiFi industry

Soon to be moog

Well, very simplistically, yes it is correct and should be expected to reduce headcount post-acquisition, that is the GCSE ('grade school') business studies answer: there are core functions which are non-linear in business growth if you like; that have an 'absolute' requirement but without a marginal need to grow as fast as the rest of the company. Thus an acquired company that is well-integrated doesn't need its payroll department any more, say.

And you don't buy out a company entirely because you like the way it's running(^) and just want all the profits for yourself. You buy it as a company because you think you have some kind of 'synergy' with it, or as an individual because you think you have better ideas for it; in either case you have some change to make that makes it worth more than it's present market valuation. It would be weird for an acquisition to result in no change.

(^So you like everything except think the dividend should be higher, I suppose.)

If there are overlaps, headcount reductions of those overlap make sense. Furthermore the takeover company must have extremely efficient existing staff with maybe 20-40% spare capacity to take over. I have seen multiple takeovers with overworked of inefficient existing staff before takeover. The takeovers destroyed that acquired business within 3-5 years simply because they dont have the people to run it after firing the previous efficient and well-trained staff. In fact their own existing staff quit because felt underpaid with the extra tasks due to let go staff. Double whammy. Overlapped staff like managers and sub-c suites still retained....which could easily cost about 20-30% of the salaries of those retrenched workers. They are also the absolutely most incompetent one that drove the business to failure. After 25years seeing how mergers ended up I come to the conclusions: #1 MBA schools are absolutely wrong about the benefits of mergers (always dont trust MBAs, if they are that good, they run their own business), #2 there is no such thing as companies synergism from mergers (but MBA called it "if realized" which simply doesnt exist in reality but might hinted on paper), and #3 the person approving mergers never have any management education and a lot not even having MBAs but fully trust some MBAs wearing nice suit especially giving off London English or behave like Steve Jobs demeanor.

> 90% margins

source/citation required?

A recent income statement is here (on page 6): https://www.vmware.com/content/dam/digitalmarketing/vmware/e...

tl;dr Margin (operating income / total revenue) is about 15%.

So the parent of this comment claiming "keep lagged revenue on existing assets and IP for 5 years while reaping profits on 90% margins" is wrong by a huge amount, right?

Not if they fire almost everyone (Twitter style), I suppose.

Isn't that what private equity firms been doing forever?

When did Broadcom become a private equity firm? I thought they baked pies.

No they didn't become a private equity firm, a private equity firm's roll-up firm bought the old broadcom and took the acquisition target's name. They didn't change the ticker though it's why they're still AVGO on NASDAQ. Looks like KKR and silver lake were the private equity folks that created avago which started rolling all these firms including broadcom whose name it took

Silver Lake was also partner of Michael Dell in taking Dell Computer Corp private (while keeping VMware public) and they did all sort of financial machinations to screw VMWare shareholders

Next year: Tripplex, a new startup from ex-VMware employees that promises 2X the performance of any other virtualization platform and doesn't charge for "extra" features!

the zoom phenomenon.

they should call it Hyper-W

But who will take my money to make minimal UI changes to VMWare Fusion year-over-year?

AFAIK Fusion development already moved to India.

It shows.

> It shows.

Mission accomplished

      Fusion now supports running Arm virtual machines on Apple Silicon Macs

https://docs.vmware.com/en/VMware-Fusion/13.0/rn/vmware-fusi...

wait what????

lol. I didn't know that was even impossible right now. But I quit playing with VMWare a few years back.

Or make sure Workstation 15.5 doesn't work in Windows 11?

Parallels will happily take that and offer you an equivalent service.

What’s the situation with Avago products? I use some of their fiber optic signal receivers/transmitters (200um-400um jacket I believe?) but now they’re Broadcommed.

Give me a quick rundown.

"broadcommed"... Today's Broadcom is renamed Avago. It was Avago which bought Broadcom and adopted its name. It's quite possible something like that will happen with the VMware brand.

I really wish there was a netiquette (does anyone still remember the term?) that paywalled articles shouldn't be posted on news aggregators like this one.

Not nearly enough

Reply on news.ycombinator.com