Cloud and virtualization software provider VMware (VMW) says it will restructure and eliminate 900 jobs. The Palo Alto company beat Wall Street’s earnings estimates, but its first quarter outlook was much bleaker than expected. VMware will take a restructuring charge of between $90 million and $110 million this year and will exit some lines of business.
The cuts amount to roughly 7% of VMware’s workforce, and seem to be more about shifting skill sets than about cutting headcount. While the company will eliminate jobs in certain areas, like its SlideRocket presentation software group, it will be hiring in other business units. VMware says headcount should actually go up during 2013 by the time all is said and done.
VMware picked up about 100 employees when it purchased Nicira last summer. The company says Nicira is poised to virtualize networking the way VMware has virtualized servers. Nicira’s CTO says he is the created of OpenFlow.
VMware told investors this week to expect more acquisitions in the future. The company recently joined Cisco and Google Ventures as an investor in Puppet Labs, an IT and data center automation company. IT storage hardware and data backup are the core businesses of EMC Corp., which owns a majority stake in VMware.
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