Citrix Systems will be giving pink slips to both full-time and contract employees.
The organizational restructuring will focus on simplifying business in all areas – product, marketing, sales, operations and development.
Citrix is aiming to achieve approximately $200 million in annualized pre-tax cost savings, with approximately 75 percent to be realized in fiscal year 2016. Citrix expects to spend $85 million for slashing employee base during the fourth quarter of fiscal year 2015 and during fiscal year 2016.
Bob Calderoni, interim CEO and president, and executive chairman of Citrix Systems, said: “Focusing on our core strengths and simplifying how we work with customers and partners will help us improve execution, drive higher profit and begin investing for growth in areas in which we provide the greatest customer value.”
As per the earnings guidance, Citrix expects to achieve net revenue growth of one to two percent in 2015 and four to five percent in 2017.
Citrix to spin off its GoTo business
Meanwhile, Citrix Systems announced plans to spin off its GoTo business into a separate, publicly traded company. The strategic decision will allow Citrix and the new company to enhance strategic focus and respective competitive positions, while permitting Citrix to improve operational efficiency.
GoToAssist, GoToMeeting, GoToMyPC, GoToTraining, GoToWebinar, Grasshopper and OpenVoice will be part of the new company. The revenue in trailing twelve months ended September 30, 2015 was approximately $600 million for the products and services to be spun off.
Citrix Systems plans to increase emphasis and resources to core enterprise products for secure application and data delivery, including XenApp, XenDesktop, XenMobile, ShareFile and NetScaler. The company will end investment in certain other products and programs, in some cases moving technologies into strategic products.
This separation will create a pure-play SaaS company. Chris Hylen, who currently serves as senior vice president and general manager of the Citrix Mobility Apps Business Unit, will serve as CEO of the new company.