Citrix announced layoffs of 1,000 full- and part-time employees today along with a separate spinoff of its GoTo product suite, including the GoToMeeting conferencing software, into a new public company.
Moreover, products that aren’t core to Citrix’s application delivery business will be terminated or integrated into other products, the company said. Most of those moves will be completed in the first half of 2016, but Citrix doesn’t expect to complete the GoTo separation until the second half.
The 1,000 job cuts do not include the GoTo spinoff. Citrix had more than 10,000 employees as of December 2014, roughly 900 of whom were cut earlier this year.
Citrix expects the job cuts to be mostly complete by the end of January.
The moves are not surprising, all of them prompted by activist shareholder Elliott Management. In July, Citrix added Elliott executive Jesse Cohn to its board and announced that a search for a new CEO was underway. Incumbent CEO Mark Templeton left shortly thereafter, temporarily replaced by Executive Chairman Robert Calderoni.
Elliott had insisted that Citrix should refocus on its application delivery business, and Citrix ultimately agreed. “Our business had grown too large and complex,” Calderoni said on a conference call with analysts today.
By the end of 2017, Citrix hopes to have shrunk operating costs by more than $200 million per year. The result would be non-GAAP operating margins of 30 percent, up from the 28 percent the company is forecasting for 2016.
Top-line growth might be slower at first, however. For 2016, Citrix is predicting revenue growth of 1 to 2 percent compared with the previous year. That’s down from the 3.1 to 3.4 percent growth Citrix is forecasting for 2015.
In 2017, however, the rewards should appear, with year-over-year revenue growth of 4 to 5 percent, officials said. None of these forecasts account for the GoTo spinoff.
Separately from all of this, Citrix announced that Tim Minahan has been named chief marketing officer. He comes to Citrix from the cloud division of SAP.
In after-hours trading today, Citrix shares were down nearly 3 percent at $76.28.