Hopkinton's VMware to lay off 800; new CFO named

Courtesy Photo

Write a Comment

By Sam Bonacci

The cloud storage company VMware has announced 800 employees will be laid off and a new chief financial officer will come in as its parent company, EMC Corporation of Hopkinton, prepares for an impending merger with Dell.

The announcements were made in a financial report for VMware released Tuesday. The layoffs are expected to cost the company $55-$65 million in the first half of 2016, but will result in savings moving forward, according to the company. Those savings will be invested in field, technical and support resources.

The company also announced that Jonathan Chadwick, VMware’s chief financial officer, chief operating officer and executive vice president, has decided to leave VMware and will instead expand his advisory roles, working with a number of companies as a non-executive board member. Current EMC CFO Zane Rowe will take on the CFO role beginning in March of this year.

The company reported strong financials for the fourth quarter of 2015, with 10 percent year-over-year growth in revenue to $1.87 billion, while net income was up 17 percent per diluted share compared to $326 million, or $0.75 per diluted share, for the fourth quarter of 2014.

The VMware announcements come as EMC prepares for a merger with Texas-based Dell that is expected to close this year. The Dell-EMC combo, which will retain EMC subsidiary VMware, will be the most expensive technology merger in history when the deal closes. The takeover's $67 billion price tag is way above the current record-holding tech buy -- the $25 billion sale of Compaq Computer to Hewlett-Packard in 2002.