VMware, a leader in cloud infrastructure and remote work, dropped employees at the worst time

Source:-media.thinknum.com

Coronavirus pandemic shelter-at-home mandates have led to a massive rise in work-from-home tools like Zoom and Cisco Webex teleconferencing software, the former seeing usage spike by as much as 300%. This has led to reports of Microsoft Cloud server demand being up by 775%. Several of our 10 early indicators of recovery are related or connected factors, such as online classes.

Yet, strangely, VMware ($NYSE:VMW) is losing employees after a quiet round of layoffs beginning in February, according to sources who reached out directly to Thinknum Media. The round of layoffs appears to be corroborated by employee count data that we track.

The cloud infrastructure company, founded in 1998 and based out of Palo Alto, California, boasted 28,530 employees on March 13. On March 21, it saw a market drop in people listing the company as their employer on LinkedIn. For a company that is built around distributed and remote products and services, this drop in workforce is worth noting.

So what’s happening? There are some indications of turmoil behind the scenes. First, VMWare saw a 14.7% loss in share price since its last earnings report. As the pandemic set in and forced people to work from home, several ex-VMware employees reached out to Thinknum Media to let us know that they had been laid off in early February.

And just last week, on March 26, the company withdrew its Q1 and 2021 fiscal year guidance citing “As described in the risk factors contained in VMware’s annual report on Form 10-K filed on March 26, 2020, VMware is unable to predict the extent to which the global COVID-19 pandemic may adversely impact its business operations, financial performance, and results of operations.”

With the cloud-company line skewing towards a bleak outlook, we wonder at the timing of employee departures. It’s possible that what we’re seeing is a bit of a hangover from a soft 2019, and that demand for VMware products have seen a surge as millions of people work remotely — and in the cloud.

Per a statement posted to WMware’s website, CEO Pat Gelsinger sounds ready to step in: “At a time when ‘business as usual’ is not an option, we need to focus on helping each other, and assisting our customers as they respond and adapt.”

“We have the capabilities to help customers across the globe enable their employees to work remotely, maintain productivity, increase connectivity, and provide for continuous secure access to applications regardless of the endpoint.”

In other words, this may be an opportunity for VMware at a moment when it needs a turnaround. But, in order to do that, it may need some employees that it laid off a month ago to return to work.

About the Data:
Thinknum tracks companies using the information they post online – jobs, social and web traffic, product sales and app ratings – and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.