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VMware Plans Job Cuts After Disappointing Outlook

Tom Brewster is TechWeek Europe's Security Correspondent. He has also been named BT Information Security Journalist of the Year in 2012 and 2013.

Cuts could hit as many as 900, but VMware still plans to increase headcount before the year is up

Despite seeing year-on-year revenue and profit rises, VMware has voiced concerns about the year ahead and announced job cuts which look likely to hit almost 1,000 employees.

The virtualisation giant saw net profit rise $6 million in the fourth quarter of 2012, compared to the same period a year ago, whilst revenues went up 22 percent to $1.29 billion.

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Pat Gelsinger, recently-appointed chief executive officer VMware, was upbeat saying it was a “strong year”, yet during a conference call the company revealed it was planning to cut 900 jobs. That’s around seven percent of its workforce.

Yet Gelsinger also said the total headcount at VMware would be up by around 1,000 by the end of the year, indicating jobs will go and then be brought back.

It all made for a somewhat confusing results day from the EMC-owned firm. which gave a cautious outlook for 2013 thanks partly to US government cuts and continuing economic turbulence across the eurozone.

Looking forward, VMware said it still expects to see 2013 revenue grow by 14 to 16 percent over 2012, and first quarter income to grow by around 11 to 13 percent over the same period last year. However, analysts expected a better outlook in both the full-year and quarter predictions.

It’s likely there will be more acquisitions ahead too, following a number of significant purchases in 2012, the biggest being that of Nicira, a software defined networking company that cost VMware $1.26 billion.

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