900 out but 1,000 in as VMware reshuffles

Vendor plans strategic changes as it posts a boost in revenue and net profit for its Q4

VMware is set for a strategic staff reshuffle this year, which will see 1,000 new workers welcomed to the vendor, while 900 existing employees face redundancy.

The vendor claims its decision to scale back in some areas will mean that more investment can be placed on certain product ranges and geographies.

The announcement came as the vendor posted a 22 per cent hike in its Q4 revenue. For the three months to 31 December, VMware saw net profit creep up three per cent year on year to $206m (£131m), on sales which jumped 22 per cent to $1.29bn.

The vendor's licence revenue rose by 16 per cent to $597m, while its total services sales shot up by more than a quarter to $696m.

The resource realignment, which the vendor claims will also see some existing staff shipped to new roles, reflects VMware's long-term strategic plan, which is to de-emphasise certain product ranges it believes "are not central to what [its] customers value the most from VMware".

The virtualisation giant was tight-lipped about exactly which areas will be de-focused, but did say that its SlideRocket offering would be one of the products affected.

VMware currently employs 13,800 people across its business, with 6,700 of those joining in the past three years.

VMware's chief financial officer Jonathan Chadwick, speaking on a call transcribed by Seeking Alpha, said: "While these choices are often tough, we know that this is healthy for our business and an important step as we plan for the long term."

Also on the call, VMware's president and chief operating officer alluded to the fact that its transactional business – which is driven through the channel – has been slow recently due to macroeconomic conditions, and unveiled plans to introduce offers and promotions for its partner community.

He said: "Going forward we are putting in place a number of programmes with our partners to help drive the transactional business in a new direction.

"This will include changes in how we price our products, the promotions we give to our channel...

"We will be doing some creative packaging with our core vSphere product as well as other management solutions to drive a better attach rate, so we are not selling what we call naked vSphere into the market.

"So we are encouraged about some of the programmes we will launch in 2013 and we do expect and anticipate them to have an impact on our transactional business with our partner community going forward."