77% of revenue is expensed to SG&A and R&D.
R&D they cut out all the non core dev efforts to bring R&D to 10% of revenue vs. 25% today - so 60%+ cuts in that in the first 6 months. Lots and lots of BU and R&D staff gone - with a big shift from PA to India for those retained and support going to a pray and hope desk somewhere with dial tone...
Sales & Marketing is $4B for majority of revenue in 2000 accounts. That is $2M cost of sale per account which is stupid levels of inefficiency given half the business is zero touch renewals and the rest is repeat sales for the 5th time plus.... Half of that is gone in the first 6 months as JPB cashes his checks into the sunset.... figure 6000 employees gonzo
G&A is $1.1B per year today all to ship the same thing in 4 iterations and across 30K SKU's because everyone is 'special'. That is cut in half day zero as the single contract model is adopted - 2K+ people gone and then the synergies begin to squeeze out more...
Within the first 6 months VMware will likely go from 35K+ employees to less than 25K in a short period of time and then in a year getting to 15-17K max. Only way to drive the cash engine they need to payoff the leverage on the loans and the economics for the deal.
This isn't a tech acquisition, it is a PE / LBO deal just like Dell / Silverlake, only Hock is going to be much more aggressive as he has no fear for his reputation or need to make believe he is a tech magnate like the farce of MD - he is a LBO guy and will strip mine this thing to the core.
Well-presented picture of the future by @1iyh+1lEuJnBw.