Key Apple and Google Chip Supplier Eyes Downsizing Post Merger Deal

Zinger Key Points
  • Broadcom to lay off over 1,200 at VMware's Palo Alto HQ from January 26, following $69 billion acquisition.
  • Broadcom's CEO Hock Tan to streamline operations, cutting support roles while retaining engineering talent.

Broadcom Inc AVGO looks to lay off about 1,300 VMware Inc. employees in California following its acquisition of the cloud-computing firm.

Broadcom closed its $69 billion acquisition of VMware on November 22 after winning regulatory approval from China.

Also Read: Big Tech Prioritize Cost Control and AI, Scaling Back Workforce Despite Business Growth

The chipmaker plans to eliminate 1,267 jobs at VMware headquarters in Palo Alto starting January 26. This move aligns with Broadcom's typical approach following acquisitions, where the company cuts support roles to reduce costs, Bloomberg reports

VMware had about 38,300 employees before the closing of the transaction.

CEO Hock Tan, known for his profitable business strategy through acquisitions, targets companies with significant market share but limited growth potential. 

Post-acquisition, Tan focuses on streamlining operations, particularly in areas like sales and human resources, to maximize efficiency while aiming to retain key engineering staff. 

The chipmaker will also review strategic options for two business units of VMware, Reuters cites from media reports.

Broadcom's clients include Apple Inc AAPL and Alphabet Inc's GOOG GOOGL Google.

Price Action: AVGO shares traded higher by 0.14% at $927.01 premarket on the last check Friday.

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