VMware to cut 800 jobs, restructure for growth

VMware will cut 800 jobs and restructure itself to invest in growth areas, the company said today as it delivered solid financial results.

The company said it expected the restructuring to cost between US$55 million and US$65 million throughout the first half of 2016.

The savings it achieves from the effort will be reinvested into "field, technical and support resources associated with growth products".

VMware also announced that global chief financial officer and operating chief Jonathan Chadwick would leave the company. Chadwick will be replaced by Zane Rowe as CFO from March 1.

The company delivered a better than expected fourth quarter, with a 10 percent jump in revenue to US$1.87 billion. Analysts had expected revenue of US$1.85 billion.

Its net income for the period hit US$373 million, compared to US$326 million in the previous corresponding quater.

For the full year, revenue came in 9 percent higher at US$6.57 billion and net income jumped from US$886 million in 2014 to US$997 million.

VMware attributed the results to growth in its NSX, end user computing and virtual SAN businesses.

The NSX division grew by more than 100 percent in the year to bring in over US$600 million. The end user computing business grew by 30 percent year on year with revenue of US$1.2 billion, and the virtual SAN line grew nearly 200 percent on 2014 to bring in over US$100 million.

The company said it expected growth in the three businesses to continue in 2016.

VMware's parent company EMC is in the process of being acquired by Dell.