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  5. Everything we know about what's going on at VMware as employees leave in droves ahead of the $61 billion Broadcom acquisition

Everything we know about what's going on at VMware as employees leave in droves ahead of the $61 billion Broadcom acquisition

Jessica Xing,Jacob E. Robbins,Rosalie Chan,Belle Lin,Paayal Zaveri   

Everything we know about what's going on at VMware as employees leave in droves ahead of the $61 billion Broadcom acquisition
  • Broadcom bet $61 billion on VMware to expand its business in the cloud.
  • But customers and employees alike say the deal is squandering VMware's success.

In May, the chip giant Broadcom announced it would acquire the software firm VMware for a whopping $61 billion. While the deal has yet to close, it's already causing chaos for some employees and insiders in the VMware ecosystem.

The buyout could help Broadcom's push into the software industry and VMware's effort to grow its size. Yet the talent at VMware has started to leave the company because of uncertainty around the deal's influence and hints from Broadcom's CEO about ending remote work. Customers are also picking up on the tension as deals fall through, with some smaller customers worried they'll get left behind.

Here's everything we know about the acquisition so far, based on Insider's conversations with partners, customers, and insiders at the companies.

Analysts were skeptical of the Broadcom acquisition from the start

From the get-go, Broadcom's plan to buy VMware seemed far-fetched. The companies have little overlap, and with its massive price tag, the acquisition would rank among the highest ever in tech.

This leaves a lot on the line for both firms, with analysts calling it a "major change of strategy." And as the companies seek to combine their efforts, they risk losing top employees as certain administration roles become duplicative in the information-technology, finance, legal, human-resources, and facilities departments.

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Customers and employees tell Insider the worst is yet to come

Work at VMware quickly lost meaning for employees under the threat of Broadcom's impending acquisition. On top of layoff worries, workers fear they'll lose remote-work benefits and the company's focus on inclusion.

Meanwhile, VMware customers are starting to feel the ripple effects. Customers told Insider they feared innovation would be stifled under the chip giant and that top talent would leave the firms.

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Workers are fleeing VMware to avoid changes from Broadcom

Customer and employee fears have started to come true. VMware deals started to slow as workers began seeking refuge at different companies.

Adding tension to the mix, Broadcom CEO Hock Tan hinted at an all-hands meeting that VMware policies like remote work would come to an end.

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Top tech companies begin scouting VMware execs and employees

Recruiters have taken advantage of employee uncertainty at VMware. Since the Broadcom deal was announced, VMware employees have reported "aggressive" recruiter outreach from giants like Amazon Web Services, Google, and IBM.

And members of top leadership have followed those workers out the door. VMware has experienced turnover this year in departments like marketing, cyber strategy, and engineering.

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VMware proceeds with business as usual during its annual conference

Despite the changes, VMware moved ahead with its flagship annual customer conference. Attendees showed up with the looming deal top of mind, hoping to get some answers. Broadcom wasn't on the schedule, and there were no signs of VMware's buyer at the event until Tan made a surprise appearance from the crowd during the day-two keynote.

Some VMware partners did, however, leave the conference feeling more optimistic about the deal. They told Insider about their plans to use the buyout to get closer to VMware customers.

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