Those VMware Cuts Hit Monday

Pat Gelsinger, VMware's chief executive, at VMworld Europe in Barcelona, Spain in October 2013.
Pat Gelsinger, VMware's chief executive, at VMworld Europe in Barcelona, Spain in October 2013.
Courtesy: VMware

The expected VMware layoffs hit Monday, according to company sources and a message board where those affected by the cuts are posting (anonymously) about their experiences.

Sources told Fortune that various parts of the vCloud Air teams—personnel in Europe, the Middle East, and Africa (EMEA), the Burlington, Ontario, customer support group, and Colorado—were cut. A post to confirmed some of this.

Work (including engineering work) on VMware (VMW) Workstation desktop virtualization and VMware Fusion is being sent offshore.

Last week Fortune reported that the company was due to cut about 900 jobs, or about 5% of its workforce.

VMware is slated to announce its fourth-quarter earnings after the market close Tuesday.

For more on the Dell-EMC deal, watch:

Much of this angst is fallout from a plan announced by Dell and EMC (EMC) in October for a $67 billion merger. VMware is majority owned by EMC. As part of the deal, the rest of the “EMC Federation” companies, including RSA, VCE, and Pivotal, would also roll up to Dell.

But to be clear, VMware was challenged even before the plan was announced. It has had to contend with Amazon (AMZN) Web Services, which is hoovering up business workloads that VMware had hoped to woo with vCloud Air.

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On Monday, Michael Dell issued a statement to reassure customers of VCE that it remains a key priority for a combined company. VCE started out as a joint venture by EMC, VMware, and Cisco, but Cisco has reduced its stake and VCE is now a business unit of EMC.

Read more: Top questions on Dell-EMC-VMware cloud

If Mr. Dell, EMC chief executive Joe Tucci, and VMware chief executive Pat Gelsinger thought execution of this plan would be easy sledding, they’ve found it to be anything but. They’ve scrambled to make it more palatable by reversing a plan to combine VMware’s vCloud Air business with EMC’s Virtustream enterprise cloud business. Tucci has acknowledged that management could have done a better job communicating the benefits of a combined company.

VMware shareholders are balking at the notion of a proposed VMware tracking stock, which some have deemed worthless.

Fortune reached out to VMware for comment and will update this story as needed.

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