Key Takeaways
- Broadcom conducted layoffs in sales and customer-facing roles just days after announcing a major OpenAI partnership
- The company continues restructuring following its $69 billion VMware acquisition
- Custom AI chip revenue grew 220% year-over-year, driving Broadcom to trillion-dollar market cap
Chipmaker Broadcom has laid off employees across sales, customer success, and account management departments this week, according to multiple reports. The workforce reductions come mere days after the company revealed a strategic $100 billion+ partnership with OpenAI to develop custom AI accelerators.
The layoffs targeted customer-facing roles while technical positions remained largely unaffected. Broadcom has not disclosed the exact number of employees impacted by the cuts.
Timing Follows Major OpenAI Deal
The workforce reduction follows Broadcom’s October 13 announcement of its collaboration with OpenAI. Under this partnership, Broadcom will develop and deploy custom AI processors starting in the second half of 2026.
The landmark deal sent Broadcom shares surging more than 10%, positioning the company alongside cloud computing giants in the specialized AI chip market.
Ongoing Restructuring After VMware Acquisition
Broadcom has been implementing rolling layoffs since completing its $69 billion acquisition of VMware in late 2023. Reports indicate VMware’s workforce has been reduced by approximately half since the deal closed, while Broadcom simultaneously increased prices on VMware products.
Despite the cuts, Broadcom has emerged as a major beneficiary of the AI boom. The company’s custom AI chip revenue grew 220% year-over-year by late 2024, helping Broadcom achieve a trillion-dollar market cap for the first time in December 2024.
Custom Chip Business Expansion
The OpenAI partnership marks Broadcom’s fourth major custom chip customer, following deals with technology giants including Google, Amazon, and Apple.
Morgan Stanley analysts project the custom AI chip market will nearly double to $22 billion in 2026, with Broadcom positioned as the market leader. While expanding its high-margin chip design business, the company appears to be streamlining other operations to maintain profitability during its scaling phase for next-generation AI infrastructure.
