VMware imposes staff salary freeze and pay cuts for top brass

'Thoughtful and prudent' measures being implemented by vendor to weather COVID-19 storm

Vmware has confirmed reports that it is freezing staff pay and slashing the salaries of its senior management, including chief exec Pat Gelsinger, to weather the COVID-19 crisis.

An internal memo disclosed a number of "cost management" measures to its 31,000 employees, Businesss Insider initially reported. These measures include staff pay freeze, delaying its promotions cycle and shifting from a semi-annual to an annual bonus.

Top execs, including CEO Gelsinger, and the company board will also take pay cuts in Q2 and Q3 as part of the measures "to support efforts to manage through the current economic uncertainty."

"We can confirm that there have been a number of cost management changes impacting the VMware workforce," VMware said in a statement to CRN.

"This is a part of a thoughtful and prudent plan designed to address the current uncertainty of the COVID-19 pandemic and the overall economic outlook, while ensuring the company has the skills and talent needed to accelerate growth as the economy stabilises.

"The fundamentals of VMware's business remain strong, and the company continue to see interest in, and demand for VMware products, solutions and services. The actions the company is taking now will strengthen VMware's foundation and ensure the company is positioned to effectively navigate the challenging landscape ahead."

The internal memo, which was signed off by CFO Zane Rowe and chief people officer Betsy Sutter, warned staff that the steps being taken are to counter the caution customers will have for the foreseeable future.

"The global economy is facing serious challenges brought on by the COVID-19 pandemic and the overall economic outlook remains uncertain," the memo stated.

"Many of our customers are under financial pressure ... they remain cautious in their short- and mid-term investment plans and that means VMware must also be thoughtful and prudent as we navigate the next several quarters."

VMware and its parent company Dell Technologies pulled their financial guidance as a result of the pandemic for their Q1 and fiscal 2021 in March.