VMWare Freezes Salaries in Response to Pandemic

VMWare froze salaries, suspended 401(k)-plan matching contributions and cut executive pay in response to the pandemic.
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VMware  (VMW) - Get Report reportedly froze salaries and suspended its 401(k)-plan matching contributions in response to the hit the virtual-machine provider has taken from the coronavirus pandemic.

"The global economy is facing serious challenges brought on by the Covid-19 pandemic, and the overall economic outlook remains uncertain," Chief Financial Officer Zane Rowe and Chief People Officer Betsy Sutter said in a memo to employees obtained by Business Insider.

"Many of our customers are under financial pressure. ...They remain cautious in their short- and mid-term investment plans, and that means VMware must also be thoughtful and prudent as we navigate the next several quarters."

The memo said executives won’t be spared from hardship. Chief Executive Pat Gelsinger, other top executives and the VMware board will see their salaries cut for six months "to support efforts to manage through the current economic uncertainty."

VMware spokesperson Michael Thacker confirmed to Business Insider that "there have been a number of cost management changes impacting the VMware workforce."

VMware is 81%-owned by Dell Technologies  (DELL) - Get Report. It’s an industry leader in virtual machines for data-center servers and computer desktops.

Virtualization allows businesses to access disparate computer systems as one network. VMWare “dominates the maturing data center server virtualization market,” Morningstar analyst Mark Cash wrote in a February report.

At last check VMware traded at $126.85, up 0.4%. It has dropped 17% over the past three months, compared with a 12% drop for the S&P 500 index.

Dell is down 21% during that period.