VMware Confirms Layoffs Post VeloCloud Buy

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VMware, which recently completed its purchase of VeloCloud Networks, is laying off what it says is a small percentage of its workforce.

The virtualization company confirmed that it made the cuts this week. It wouldn’t say how many employees were cut, or the types of positions impacted.

“We can confirm that there has been a small reduction in force at VMware this week,” said Michael Thacker, VMware spokesman. “Workforce rebalancing is a continual activity across VMware’s businesses and geographies to ensure that resources are aligned with business objectives and customer needs. We continue to recruit in areas of strategic importance for the company.”

Ovum’s Stephanie Gibbons

VMware’s acquisition of VeloCloud has been an interesting one, and is likely one of the drivers of these “small” layoffs, said Stephanie Gibbons, principal analyst at Ovum.

“In this industry, both communication service providers and their vendors face a skills shortage, and need to train and hire individuals with the technical and software knowledge required to manage the telco transformation to software-mediated networks,” she said. “By adding new capabilities and expanding its customer base, VMware has to take a look at incumbent talent, redundancies through acquisition, and any new talent needs.”

In November, IHS Markit said VMware’s purchase of VeloCloud and Cisco’s purchase of Viptela have established the two companies at the top of the SD-WAN heap.

“By integrating the VeloCloud SD-WAN offering into the VMware NSX platform, VMware is now positioned squarely against Cisco in the SD-WAN space,” Gibbons said. “Another benefit could be that it increases VMware’s SaaS offerings, a focus for the company for a while.”