VMware is cutting 900 jobs, nearly 7 percent of its workforce, and expects revenue to fall short of Wall Street's expectations in the current quarter.
Its stock dropped almost 15 percent in after-hours trading.
VMware Inc. said Monday that it expects revenue in the range of $1.17 billion to $1.19 billion for the first quarter. Analysts polled by FactSet estimated $1.25 billion.
VMware earned $205.8 million, or 47 cents per share, in the fourth quarter. That's up from $200.4 million, or 46 cents per share, a year ago.
Revenue rose 22 percent to $1.29 billion, slightly above estimates.
VMware's virtualization software allows one computer to function as multiple machines, which can help companies save energy and other costs.
The company had 13,800 employees at the end of 2012.