Despite growth, Google and VMware to shed cloud workers – SiliconANGLE News

Google LLC and VMware Inc. are both planning to shed a small number of jobs from their respective cloud computing businesses, despite having seen some strong growth in the area in recent months.

The job cuts at Google are said to be part of a reorganization of the companys cloud business, officials said in a statement to the press.

We recently communicated organizational changes to a handful of teams that will improve how we market, partner, and engage with customers in every industry around the globe, a spokesperson for the company told MarketWatchFriday. We made the difficult, but necessary decision to notify a small number of employees that their roles will be eliminated. Were working with our internal mobility teams across the company to help those affected by this change, and hope to find them new roles within the company.

As for VMware, the virtualization software firm is planning to lay off more than 200 workers in April, including workers at the executive and director level, the San Francisco Chronicle reportedThursday.

VMware said in a statement the job cuts are part of a regular workforce rebalancing that ensures the firms global resources are better aligned with its strategic objectives and customer needs. The company is planning to get rid of a divisional chief technical officer, plus directors of research and development, and database architecture and digital marketing, the Chronicle said.

The changes come even though both companies cloud businesses are reportedly making good progress. This month Google reported cloud sales of $8.9 billion, up 53% from a year ago and double what the unit made in 2017. Thats a success story in itself, but Googles cloud business still trails Amazon Web Services Inc., which racked up $2.6 billion in profit in its most recent quarter. Its also some way behind Microsoft Corp., which lastmonth reported cloud revenues of $11.9 billion.

VMware is also thought to be making good progress in the cloud thanks to its VMware Cloud on AWS offering, which has gained traction by offering customers a simple, safe and speedy path to hybrid cloud and operations modernization.

The layoffs are painful but necessary asboth companies need to move quickly to respond to changing market dynamics, Constellation Research Inc. analyst Holger Mueller told SiliconANGLE.

The requirements for success in the cloud are higher than in most other industries, particularly for providers in a challenger position, such as Google, and those that are being challenged themselves, like VMware is, Mueller said. Enterprises will often choose a platform vendor that moves faster than the market they operate in.

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Despite growth, Google and VMware to shed cloud workers - SiliconANGLE News