VMware Shuffles Workforce After Decent Q4

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VMware Inc. is set for a strategic staff reshuffle this year, which will see 1,000 new workers welcomed to the vendor, while 900 existing employees face into redundancy.

 Editor’s note:  As part of our special editorial partnership, Channelnomics is publishing this recent article from CRN in the UK.

VMware Inc. is set for a strategic staff reshuffle this year, which will see 1,000 new workers welcomed to the vendor, while 900 existing employees face into redundancy.

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The vendor claims its decision to scale back in some areas will mean that more investment can be placed on certain product ranges and geographies.

The announcement came as the vendor posted a 22 percent hike in its Q4 revenue. For the three months to Dec. 31, VMware saw net profit creep up three percent year on year to $206 million, on sales which jumped 22 percent to $1.29 billion.

The vendor's license revenue rose by 16 percent to $597 million, while its total services sales shot up by more than a quarter to $696 million.

The resource realignment, which the vendor claims will also see some existing staff shipped to new roles, reflects VMware's long-term strategic plan, which is to de-emphasize certain product ranges it believes "are not central to what [its] customers value the most from VMware".

The virtualization giant was tight-lipped about exactly which areas will be de-focused, but did say that its SlideRocket offering would be one of the products affected.

VMware currently employs 13,800 people across its business, with 6,700 of those joining in the past three years.

VMware's chief financial officer Jonathan Chadwick, speaking on a call transcribed by Seeking Alpha, said: "While these choices are often tough, we know that this is healthy for our business and an important step as we plan for the long term."

Also on the call, VMware's president and chief operating officer alluded to the fact that its transactional business – which is driven through the channel – has been slow recently due to macroeconomic conditions, and unveiled plans to introduce offers and promotions for its partner community.

He said: "Going forward we are putting in place a number of programs with our partners to help drive the transactional business in a new direction.

"This will include changes in how we price our products, the promotions we give to our channel...

"We will be doing some creative packaging with our core vSphere product as well as other management solutions to drive a better attach rate, so we are not selling what we call naked vSphere into the market.

"So we are encouraged about some of the programs we will launch in 2013 and we do expect and anticipate them to have an impact on our transactional business with our partner community going forward."

For more UK channel coverage from CRN, visit www.channelweb.co.uk

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