Dive Brief:
- Chip designer and manufacturer Broadcom announced thousands of layoffs across eight states at the end of November.
- The layoffs follow the San Jose-based company’s acquisition of cloud computing company VMware last month, from which a portion of the layoffs are taking place. The $61 billion acquisition was initially announced in May 2022 and Broadcom closed the transaction last month.
- The largest cuts will be in California, where the company’s Palo Alto headquarters are located. Broadcom is cutting 1,267 jobs in the state, which will start on Jan. 26, 2024, according to a state WARN notice.
Dive Insight:
The more than 1,500 layoffs in other states include:
- 116 workers in Reston, Virginia, beginning Jan. 26, 2024
- 169 workers in New York City, beginning Feb. 26, 2024.
- 184 workers in Broomfield, Colorado, beginning Jan. 26, 2024.
- 217 workers in Atlanta beginning Jan. 26 through May 24, 2024.
- 577 workers in Austin, Texas, beginning Jan. 26, 2024.
- 158 workers in Bellevue, Washington, beginning Jan. 26.
- 150 workers in Boston, beginning Jan. 26, 2024.
In total, Broadcom has announced 2,838 layoffs so far in the last month. The company hasn't disclosed the types of positions affected by the reductions.
Broadcom manufactures and sells hardware components used in computer servers. The first part of its business is in wireless, networking, cable modem and infrastructure components, which generated $2 billion in revenue during Q4, up 7% year-over-year, according to a Q4 earnings call.
The company’s other business segments include semiconductor solutions and licensing. Revenue for this segment in Q4 was $7.3 billion and represented 79% of total revenue in the quarter.
Following the acquisition, Broadcom is restructuring into four divisions and divesting VMware's end-user computing unit and cybersecurity company Carbon Black, while shifting its focus to subscription licenses of bigger software bundles. The CEO said the business units were no longer part of the core focus of Broadcom.
Broadcom CEO Hock Tan emphasized that it plans to continue investing in VMware, focusing on advancing private and hybrid cloud solutions for enterprise customers, according to the Q4 earnings call. The CEO expects VMware to contribute $12 billion in revenue for 2024, Tan told investors.
