VMware has confirmed to CRN that the company is laying off an undisclosed number of employees this month including Shawn Toldo, vice president of VMware’s Worldwide Partner Organization.
“We can confirm that there have been a limited number of changes to our workforce this month,” said VMware in a statement to CRN USA. “This is part of a regular workforce rebalancing as we realign resources and investments to opportunities at scale.”
The VMware layoffs come just weeks after Dell Technologies, which holds a majority stake in VMware, confirmed that it was also laying off an unspecified number of employees.
On the channel front, Toldo’s departure follows the recent abrupt departure of VMware’s global channel leader, Jenni Flinders. In addition, Dell Technologies global channel chief Joyce Mullen is also heading for the door, telling CRN USA her last day will be 14 August.
“One of the biggest worries of ours is that Dell and VMware don’t lose sight of the importance of the channel during COVID,” said one executive from a solution provider who partners with Dell and VMware and did not wish to be identified. “I still have trust in both of them. These layoffs may be a sign of the times, but these next few months and the next few go-to-market moves they make will be very scrutinized by us,” the executive said.
VMware has approximately 31,000 employees on a global basis.
VMware declined to provide the specific number of employees being laid off this month. The company also did not specify which business units or geographies would be impacted.
Dell Technologies, which has approximately 165,000 employees, said its recent layoffs were not related to the coronavirus pandemic. One source told CRN USA that the Dell layoffs were part of an internal Dell sales reorganisation called One Dell, aimed at reorganising the company’s entire sales organisation. “One Dell will eliminate personnel duplications,” said the source.
VMware has been acquiring companies at a rapid pace in 2020, spending millions gobbling up Datruim, Blue Medora, Fastline, Octarine and Nyansa. In 2019, VMware spent billions purchasing eight companies—the most acquisitions for VMware in a single year— including Avi Networks, Aetherpal, BitFusion, Bitnami, Intrinsic, Pivotal Software, Uhana, VeriFlow and its blockbuster US$2.6 billion buy of Carbon Black.
Dell is currently exploring a spin-off of its 81 percent equity stake in VMware, which it acquired through its $67 billion purchase of EMC in 2016.
Sources tell CRN the plan is to sell its 81 percent stake to current Dell Technologies shareholders, the largest of which is Dell founder and CEO Michael Dell and his private equity partner Silver Lake. If all goes accordingly, sources told CRN that Michael Dell will own approximately 42 percent of VMware, while Silver Lake will hold about 11 percent.
In January, VMware also confirmed to CRN that the company was laying off an unspecified amount of employees as part of its annual “workforce rebalancing” aimed at ensuring resources across its across global businesses and geographies were aligned to customers and objectives. VMware recently overhauled its massive customer experience organization by creating a new 4,000-plus organization that combines VMware’s global services, customer success, professional services and technical support teams together.
Regarding its layoffs this month, VMware said it has an active program to ensure, where possible, impacted employees find new opportunities within or outside VMware.
“Given the ongoing economic uncertainty, we have also taken additional steps to support these employees and their families through the transition,” said VMware.