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Dell-owned Pivotal is preparing for as many as 150 layoffs ahead of its $2.7 billion acquisition by VMware, and employees are openly protesting management over it (VMW, PVTL)

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Dell-owned Pivotal is preparing for as many as 150 layoffs ahead of its $2.7 billion acquisition by VMware, and employees are openly protesting management over it (VMW, PVTL)

Category : entrepreneur

  • Employees at Dell-owned Pivotal learned earlier this week that the company will face significant staff cuts of up to 150 amid its $2.7 billion acquisition by VMware.
  • These cuts will include the workplace operations, or WorkOps, team, which is responsible for managing the office and maintaining Pivotal’s corporate culture for its 3,000-plus employees worldwide.
  • Employees are circulating an open letter asking VMware and Pivotal leadership to retain the workplace operations team. A person familiar with the matter says that the letter has over 250 employee signatures.
  • The letter says that laying off the WorkOps team would be a breach of trust between Pivotal and its new owners at VMware.
  • “VMware and Pivotal are working together to ensure our combined organization will be structured for success,” a VMware spokesperson said. Pivotal declined to comment.
  • Click here for more BI Prime stories.

The Dell-owned developer software company Pivotal is facing significant job cuts as it prepares for the closing of its $2.7 billion acquisition by VMware, Business Insider has learned.

Pivotal employees learned earlier this week that cuts are coming, according to a person familiar with the situation — including the workplace operations team, or “WorkOps,” which it plans to eliminate and replace with contractors. Our source says that the cuts are likely to affect as many as 150 of Pivotal’s 3,000-plus workforce.

The plan to outsource the WorkOps team hasn’t sat well with employees, who are circulating an open letter to Pivotal and VMware management asking them to reconsider the decision. Over 250 employees have signed the letter, according to the person familiar. You can read the full letter below.

WorkOps are “directors of happiness,” as the letter describes the role, who are responsible for managing the office, maintaining office culture, setting up events, and helping to onboard new hires. Pivotal has long prided itself on its corporate culture, which for some teams has included a daily breakfast buffet followed by an all-hands meeting.

“We understand that mergers are complex; perfection is impossible,” says the open letter, in part. “However, the decision to replace Workplace Operations reveals a crucial gap in VMware’s understanding of Pivotal as an organization, and VMware’s understanding of our needs as practitioners.”

The letter further warns management about the “morale impact” of outsourcing the WorkOps team among those employees who remain at Pivotal after the acquisition closes, which is expected to be in January.

The letter also expressed concerns that VMware “appears to be taking a dictatorial approach on details of the acquisition,” rather than learning from Pivotal’s culture.

In June, Pivotal’s stock tanked over 40% after announcing its earnings during what a Wall Street analyst called a “train wreck quarter.” Its stock still has not recovered since then, although it rose shortly before VMware announced its intention to acquire the company in August. 

VMware, which is also controlled by Dell, said that it decided to acquire Pivotal because of its new focus on Kubernetes, a popular open source cloud computing software that started at Google. Analysts have also said that this planned acquisition is VMware’s play at getting closer to developers.

“VMware and Pivotal are working together to ensure our combined organization will be structured for success,” a VMware spokesperson said. “We look forward to welcoming Pivotal team members to VMware and beginning the integration efforts when the transaction closes, and are excited to combine Pivotal’s development platform, tools and services with VMware’s infrastructure capabilities to help customers build, run and manage modern applications.”

Pivotal declined to comment.

You can read the full open letter below:

To Pivotal & VMware leadership:

We, the undersigned, are committed to Pivotal.

In the interest of preserving what we value about this organization through this time of transition, we urge you to carefully consider what we have to say.

Before we proceed, let’s be clear that we understand that the Pivotal we’re committed to is not necessarily an organization that still exists, or will continue to exist. Some of us are still trying to determine what that means for us and for our work. The values of the Pivotal we loved are as follows:

Do the right thing, do what works, be kind.

We’re ​serious​ about these values. They’re essential to our productivity. We need to see them in action to feel safe to collaborate.

We need to hear them in discussions and communications of leadership. We need them to make continuing with this company attractive.

As we contemplate becoming VMware employees and stockholders, we are considering important questions. Can we build enough trust to be as committed to VMware as we are to Pivotal? What, if anything, can we do to ensure the success of the organization that emerges from this transition? How do we preserve the value of our business in new contexts? How do we contribute to creating something even better in our new home, with our new colleagues?

As concerned Pivots trying to answer such questions, we’re responding to your recent decisions to outsource a vital Pivotal team.

We understand that mergers are complex; perfection is impossible. However, the decision to replace Workplace Operations reveals a crucial gap in VMware’s understanding of Pivotal as an organization, and VMware’s understanding of our needs as practitioners.

Beyond this functional-understanding concern, it’s important for you to understand the morale impact of this decision on those employees to whom you intend to retain. Every employee you want to retain has been impacted by the unparalleled kindness of the people in Pivotal’s mature and integrated Workplace Operations practice.

Every member of Workplace Operations has supported and offered kindness to the product and consulting staff in the offices they serve and maintain. Our engineering staff is passionate about this support; stories of the efficacy and history of the ask@ system are a cultural touchstone. Workplace Operations (or “Directors of Happiness”, as they were once called), built and operated this system. They’ve been key to Pivotal’s success from the beginning. After this news broke, the #acquisition Slack channel was filled with stories about the impact Workplace Operations has had on all of us.

They’ve accomplished this because they are Pivots, and are as committed to the Pivotal values as any of us. VMware calls us to the values of doing things together; workops is part of our togetherness. You ask us to build trust; workops is a cultural glue that creates an environment of safety and trust. VMware aims to make things possible; we work best when we work together, and WorkOps is a key enabler of our collaborative culture. You ask us to give more; WorkOps give as much as anyone and keep the rest of us in a position to give our best, as well.

We admire these VMware values. They hew close to our own guiding principles, which drew many of us to Pivotal and which have kept us here.

We urge you to retain the Workplace Operation practice and practitioners.

If you do not, we need the following questions addressed as we consider our future actions:

      • At the front line it feels as though you have cast aside vital collaborators in the building of this business for no particular reason. ​It is not right, it will not work, and it is not kind.​ Are we missing something? What reasoning supports this change?
      • Workplace Operations is vital to maintaining office culture for Pivots and clients. Workplace Operations people are among the ​first Pivots hired for any office, as they set, build, and maintain the culture.​ This culture is a critical component of our efficacy, both in our capacity as trusted partners for clients, and in our capacity as producers of working technology. How can this ​entire complex role​ be filled by contractors held at arm’s length from the body of the company?
      • Workplace Operations goes beyond a “front desk” job. We count on these Pivots to maintain the structure, facilities, systems, processes and not least the ​feel​ of the office. The resulting environment forms a ​key mechanism Pivotal Labs uses to liberate client developers from the blinders of their status quo. Labs is critical to both customer and product success.​ Without the benefit of our long-honed WorkOps practitioners, how can Labs distinguish itself from low-cost “body shops” which do not create such environments?
      • One of the benefits of a closely integrated, mature, and highly-aligned WorkOps practice is that it’s possible to work with them in a highly iterative, integrated, agile manner. IT Support and office management could not function at their current high level without such a close and effective partner. How are other disciplines expected to continue to excel when their highly-optimized relationships are casually destroyed?
      • Workplace Operations built Pivotal alongside engineering, product management, design, data science, platform engineering, and many other disciplines.​ If WorkOps is a disposable practice, what makes our other disciplines safe​ from similar outsourcing?
      • VMware appears to be taking a dictatorial approach on details of the acquisition. This approach is harmful; it appears leaders we have trusted are being brushed aside and made ineffectual. ​Pivotal is challenging the status quo and asking that you rethink this approach.​ What will you do to make future decisions in a way that treats Pivotal leadership as peers, colleagues and friends?
      • VMware leadership spoke of their interest in retaining, sustaining and learning from Pivotal’s culture. Many Pivots had, after discussion with VMware and ex-VMware colleagues, begun to accept this as a good faith intention. With this decision, it’s difficult to credit VMware’s intentions. ​This breaks the trust that VMware sought to build during the announcement and subsequent communications. ​Why should we take any future statements about what VMware values about Pivotal seriously?
      • We’ve heard VMware will replace Workplace Operations with a contractor. VMware appears to recognize there is a job that needs to be done, but perhaps has not recognized how deeply woven the job is into so many aspects of our practice. ​We believe that we should give more​ in our ongoing relationship with these and other critical enabling staff, placing the organic, inalienable nature of the role ahead of abstract consistency, model alignment, or marginal financial savings. How can any contractor hope to enable Pivots as well as other Pivots have?



        We want a future for our offices that includes Workplace Operations. We believe that such a future is necessary for a successful, profitable integration. We urge VMware and Pivotal to find a solution for this together, and to see this as an opportunity for us all to learn how to proceed with the acquisition more thoughtfully.

        What we will not do is silently watch mistakes like this happen. Our values and our commitment to this organization do not allow for it. We expect better. Do not take away the enabling core of our culture and betray our trust.

Do you work at VMware or Pivotal? Got a tip? Contact this reporter via email at rmchan@businessinsider.com, Signal at 646.376.6106, Telegram at @rosaliechan, or Twitter DM at @rosaliechan17. (PR pitches by email only, please.) Other types of secure messaging available upon request. You can also contact Business Insider securely via SecureDrop.

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Sammy Singh

Global VC, Founder, and entrepreneur extraordinaire as featured in Inc. Magazine, Bloomberg, and Forbes. Sammy Singh is a graduate of UCLA and Wharton School of Business as well as a former student of Loyola University of Chicago. Sammy is best known as a renowned financial technology global entrepreneur and has founded over 26 different firms across industry and all over the world. He is a venture capitalist,a TV/ Film actor, tax specialist, and marketing solutions strategist. Connect with Sammy Singh on social media below! www.linkedin.com/in/cfo www.instagram.com/champagnegqpapi www.facebook.com/officialsammysingh www.twitter.com/cxosynergy www.medium.com/@sammysingh www.crunchbase.com/sammysingh

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