Thread regarding CA Technologies (CA Inc.) layoffs

Broadcom Acquisition

Folks get ready for a different culture - fast decision making, every decision about bottom line, no WFH policy etc. This is coming from someone who went thru acquisition/integration with Broadcom.

Here's what to expect if you are in Finance, HR, and any general support function ---- huge cuts. If you are in core functions, I guess mainframe, they will keep R&D pretty much in tact, but if your division or product line is futuristic yet low income - good luck, BRCM doesn't believe in keeping science projects. Sales management will see a lot more cuts than actual sales, again without knowing how come CA SG&A is so high, I can't speculate more. BRCM takes pride in have SG&A around 1-2% of total sales (public information).

2 week salary for 1 year of service has been standard severance for BRCM acquisitions, don't think this has/ will change. BRCM doesn't short change you in severance process, will also give you retention bonus, if they tell you that you will stay for one year or 6 months.

Get ready to be surprised at the level of openness in communication about your employment status, once you are close to the closing of the deal - BRCM is ruthless yet surprisingly honest in communicating about what they are going to do with those who are acquired. Three status, you have a job, you don't have a job, you are on a transition for x many months with this much retention bonus.

Going forward compensation, get ready to be pleasantly surprised, look up glassdoor.com for compensation reviews. For those of you lucky enough (or ...) to stay, plenty of $$ out here, mostly in stocks and increased bonus targets.

It s---s that CA acquisition has vanished so much of our stock value, but I guess we'll see, most folks at BRCM trust CEO financial prowess and still think that he will pull rabbit out of a hat and our stock will be over $250 - I am still scratching my head :) yet hard to argue against Hock's track record!

Reason for the post: I have been thru the sleepless nights, anxiety, which many of you are going thru, so I thought I offer my experience, not sure to calm you down but at least prepare for what to expect. Good luck to all!

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Post ID: @OP+Ua7JP4W

15 replies (most recent on top)

There is approximately $8billion in cash on CAs books...Broadcom paid $11billion for over $1billion in free cash flow. Cost cutting will increase cash flow even more. Sell off of marginal products and business units will generate more cash.

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Post ID: @1ocmu+Ua7JP4W

What is Broadcom's "history" after an acquisition, specifically the first round? If the deal is solidified in Q4, will the first round be shown the door that day, or does the HR bureaucracy take a quarter to finalize everything (that's my experience at other companies)?

For something like this, at a company this large, the past is a good indicator of [near-]future events I think.

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Post ID: @1bxsb+Ua7JP4W

Depending on which location, I would stay if you are in Santa Clara, Plano or Burlington. Anywhere else, I would STRONGLY consider looking.

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Post ID: @vwdo+Ua7JP4W

Totally agree! Never trusted him!

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Post ID: @iidz+Ua7JP4W

You are really screwed and will be on the first reduction list. Sorry.

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Post ID: @cjkq+Ua7JP4W

I'm one of the few remaining WFH employees.... I assume I'm screwed.

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Post ID: @btng+Ua7JP4W

I would not bet on the Islandia Campus continuing to operate. The facility was designed to hold over 8k and now has less than 1000. It's almost like a graveyard and CA sold the property in 2006 and the lease expires in 2021. I expect Broadcom will pay a fee to terminate early and move the handful of development staff it intends to retain in a much smaller facility, most of them live in Queens anyway

I think it will be a long haul for Broadcom to get value from CA. Even though there is a lot of overlap in the sales, marketing, and infrastructure orgs which can be cut it will take time and money to get everyone on the same page not to mention all of the disparate systems in operating order. Many CA customers have been jumping ship for years and there is no reason to think that will change under Broadcom. Computing has changed and CA along with their technology has not. Knowing the inside of both companies quite well, there will need to be a new mission and additional acquisitions for this to be a positive future direction for Broadcom.

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Post ID: @2phw+Ua7JP4W

All valid points. There is an article floating around where their CFO said they are looking to remove over $1.3 billion, yes, that is a billion in expenses. It makes sense, you have to cut deep to make this buy profitable and a value for Broadcom. They are not stupid and they will get value out of this deal. Most people will be cut if they are not selling or development, and even those groups will be impacted. I see many comments about Islandia being closed or shut down, which clearly will be accurate, but other areas will be impacted as well, there are not that many people left in Islandia, probably 1,000. The majority are admin services types and there is no need for them in the new world. I would not take a wait and see approach and get going now before the market is flooded with people looking for the same job. Good luck. There is life after CA.

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Post ID: @2stb+Ua7JP4W

CA pays well for Long Island but not for the tech industry. It is about 20% below average and there is a tremendous disparity with many identical roles having $100k variances in base salary. Most bonuses outside of sales are 20% of overall compensation. There is some bloat in middle management particularly in the sales org but CA has been cutting staff for more than two decades, shifting some dev teams outside the US as well so it's less than most would think. There will be a lot of redundancy in sales, marketing, and administration. Broadcom does not provide the same type of admin support to middle tier staff; for those people in these roles they should start looking for a new home now.

Turnover in less than 4 years is high at CA, 51% but 22% of the company has been there for 17+ years and 30% of staff are Baby Bppmers. You can expect at least half if not more of those to be given their walking papers by the new regime. They want conformity and this is an easy way to achieve it.

Broadcom will likely cut all low performing products or sell the IP off in addition to the staff cuts. This should be an odd concept for CA employees because that was Charles Wang and Sanjay Kumar's standard practice during acquisitions. We slashed Sterling to the core during the acquisition.

Things that may go by the wayside, will likely impact Islandia employees who have always had the greatest benefits which were not afforded to any other location like a Montessori school onsite, subsidized cafeteria, free breakfast, a gym that would rival any health club, free ample parking, car washes, massage facilities, dry cleaning, etc. are likely to be gone in short order. I also think programs like adoption assistance, pet benefits, the very generous parental leave program, $2M per year in matched charitable contributions, coverage for gender confirmation, etc. will be sunsetted. For those who thought that CA was about Wall Street performance, they are about to gain a whole new understanding of what that really means.

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Post ID: @2orx+Ua7JP4W

CA is by far the most ruthless software company in the world. The practices inside the company are similar to Broadcom, swift and sharp. The policy for retention and severance are nearly identical.

They fire at will with no warning and gut almost every company they acquire. You are either contributing to the numbers that make Wall Street happy or you are out. Don't think about retiring from the company because no one does and you should plan accordingly. I came into CA via acquisition, led multiple business units during my 5+ years and bought multiple companies for them so I've been through the drill. Testifying before the SEC, watching my former boss Sanjay Kumar being sent to prison a few years after I left. CA would like for people to believe the company changed, it did not. The old culture lives on and it will be even more emboldened by the acquisition by Broadcom.

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Post ID: @2qvw+Ua7JP4W

OP here, good discussion... thanks!

Bit surprised to hear that bonus in general admin functions are as high as salary. I thought only sales or pre-sales functions make that kind of bonuses but their base is then less than average. That being said, BRCM folks compare their total comp to many high tech companies in bay area (google, FB, NTAP etc) and most feel that they are compensated equally well, if not better, perhaps due to RSUs and stock gains. Again, I am surprised if CA tech folks are paid as high - but good if you are!

Broadcom may have some bloated acquisitions, but after a year of DAY1, all fat is pretty much gone.

Company is run very lean, as you can imagine.

In my opinion, CEO won't buy if he doesn't believe he would be able to squeeze so much opex$, and based on last post (limo and multiple offices...) I tend to believe there is some fat to cut, when I was acquired, I thought my company was well run, but boy I was wrong and BRCM more than doubled OI from my company's divisions.

I doubt he is trying to make mark in Software world, but I can be wrong. He will invest in product lines which are pumping out money, but he is a very miser guy, so will question every head count...

Hock likes sticky products, as he said in multiple earnings calls, and if CA has sticky product customers will be willing to pay up...

If I may ask, how come SG&A is so high, especially if you guys are moving a lot of folks to low cost region?

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Post ID: @oyr+Ua7JP4W

There is no god damn way in hell that Broadcom gets value out of spending $20 billion on CA while losing $20 billion in stock value AND losing investor confidence in the process.

No way. No how.

The deal would STILL have been dubious if the investor and analyst reactions were neutral.

The math isn’t there.

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Post ID: @loh+Ua7JP4W

Agree with the post about CA has been cutting for a long time. Broadcom has to remove over 1.5 billion from CA for it to make sense. If CA has roughly 11,000 employees today, that would mean they probably need to cut about 80% of CA. If you think CA isn't bloated right now, make no mistake, it is going to get pretty thin quickly. As the poster mentioned earlier, they will move quickly to cut people, so the admin folks will cut quickly - but so will customer support, marketing, etc. I bet they will cut between 4,000 - 6,000 people instantly and then a year from now, cut another 2,000 - 4,000 people. CA as we know it will be down to 2,000 or 3,000 people. Broadcom will get value out of this purchase but cutting the expenses, that contrary to popular belief are still bloated. How many companies of this size have private jets, limo drivers and multiple offices within 50 miles of each other. Not many.

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Post ID: @ugx+Ua7JP4W

Thanks for the posting. Here’s my response as a CA employee:

1: CA squashed most WFH a few years ago. Some people still have a WFH status but it’s a very small percentage of the work force.

2: CA has been cutting teams to bare minimum for years. It’s not like Broadcom is acquiring bloated organizations. We’re currently going through an announced 800 employee layoff and there are typically routine cuts at least 2 times a year. I’m sure there will be more cuts but it probably won’t feel much different to the average CA employee than how it has been for years.

3: I don’t think there are a lot of pet “science projects” at CA anymore. Years ago large expensive teams would flounder for years trying to develop large enterprise software monstrosities that went nowhere. I don’t think that’s the case anymore. Incubation teams trying to innovate are kept small and I think they pull the plug on them pretty early if they’re not producing.

4: it’s good to hear that severance will remain the same as CA’s plan.

Overall I think this is a bad deal for Broadcom’s investors and employees. If the investor and Wall Street community think this is a wingnut plan they will take their investor dollars elsewhere. Broadcom has lost, what, 20 billion in value on top of the approx $20 billion to buy CA? It’s lunacy. And if the CA purchase is just the first in a plan to buy more software companies then how badly will the next one ding Broadcom’s stock? ESPECIALLY if the purchase of CA proves to be a fruitless debacle.

For CA employees and customers, being absorbed by an entity with a hostile investment community who doesn’t buy into the software strategy, it will be an utterly depressing decline.

Keep your insights coming!

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Post ID: @nhi+Ua7JP4W

Very helpful post and thank you for taking the time to share it with us. CA is a challenged brand and has been so for some time. From a compensation standpoint, we are paid more than the average company, especially on Long Island. Our bonuses in some cases are equal to our base salaries, and I’ve been lead to believe that BRCM is not that generous, we may be th first acquisition where we won’t be making more, but as a person in accounting, I have no hopes for a job there and understand that. It doesn’t sound like a great environment to me, but each person should and can make their decisions based on what is best for them. Under CA’s “management”, Islandia’s future was always questionable, with them cutting Legal, Finance, HR, CDC and other groups, Islandia’s future is now certain, way ahead of the lease expiration. Good luck to everyone, sad end for CA, but one person will do well, the person that drove this company right into the ground. Never trusted that individual from the moment he arrived.

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Post ID: @tkx+Ua7JP4W

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