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January 7, 2016updated 31 Aug 2016 10:49am

EMC tightens grip on converged infrastructure subsidiary VCE as job cuts loom

News: EMC has also appointed a new president of VCE.

By James Nunns

EMC is continuing to make big changes as it restructures its business ahead of its acquisition by Dell.

The converged data centre infrastructure subsidiary VCE is the latest to be faced with big changes, this time with a reshuffle at the top while jobs cuts are reported to be looming.

Chad Sakac is to become the president of the company, while current CEO Praveen Akkiraju will be retained in an advisory role.

Sakac who has been with EMC for 11 years will also keep his role with the company as president of global systems engineering.

Sakac will report to David Goulden, CEO, EMC, Information Infrastructure and will be responsible for the continued innovation of VCE’s converged infrastructure and solutions, the company said.

The move comes as EMC appears to be moving its subsidiary more closely into its business, making it part of the EMC Converged Platforms Division.

EMC claims this will enable VCE to, "fully leverage EMC in helping customers implement their IT transformation plans."

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The replacement of Akkiraju doesn’t appear to be because of doing a bad job, with the blog post that announced the news detailing the successful job he has done.

Akkiraju who had been in charge since 2012 had overseen an expansion of VCE’s portfolio to make it one of the stronger companies in the converged infrastructure market and a run rate of more than $2billion.

Other than a tighter alignment with EMC no reason has been given for the replacement of Akkiraju at the top of VCE.

According to sources cited by The Register, VCE is also expected to announce job cuts with around 250 staff likely to be let go this week.

According to the source, the cuts will hit all levels including some senior managers; this move would make sense as EMC brings VCE closer to its own operations, perhaps believing that it can cut costs.

If these cuts are to materialise it wouldn’t be the first of the New Year from EMC. In an SEC filing the company said that it was planning a large amount of layoffs as part of an effort to save $850 million.

The company has said it has set aside $220 million for cash payments with the majority of layoffs expected in the first quarter of 2016.

CBR contacted VCE for comment regarding the job cuts; at time of publishing no comment had been made.

All this turmoil stems from Dell’s proposed acquisition of EMC for $67 billion which has created turmoil for other subsidiaries such as VMware from EMC and Perot Systems from Dell.

While Dell is looking for a buyer for Perot Systems, VMware has seen its share prices fall and upheaval regarding the Virtustream cloud project with EMC.

Proposed as a 50/50 partnership in October, an SEC filing from VMware in December announced that it would have no stake at all.

The turmoil created by the mega-merger appears likely to continue as cost cutting and consolidation of products develops through the year.

 

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