Citrix to Spin Off Business, Cut Jobs
November 17 2015 - 4:57PM
Dow Jones News
By Nathan Becker
Citrix Systems Inc. said it planned to spin off a business into
a new public company and slash costs, months after activist
investor Elliott Management Corp. called for change at the software
firm.
Citrix said it would spin off its GoTo business, which includes
the GoTo Meeting software that allows users to connect to business
meetings from many devices.
It also noted that it would restructure its labor force, focus
on its core business and optimize operations and resources. The
company said it expects to cut about 1,000 full-time and contract
jobs, mostly this month and in January 2016, excluding the effect
of spinning off the GoTo business.
"We are simplifying our business in all areas -- product,
marketing, sales, operations and development," said interim Chief
Executive Bob Calderoni in a news release.
Shares of Citrix declined 2.4% in after-hours trade.
In January, Citrix had announced a restructuring program by
which it would cut more than 700 jobs. At the time, the company
said it expected to save $90 million to $100 million.
In June, Elliott Management, a specialist when it comes to
activism in technology companies, zeroed in on the company, saying
it should slim down by selling assets and cutting costs. At the
time, it suggested Citrix could sell or spin off some of its
businesses, among other options.
Citrix said the moves are expected to save it about $200 million
a year before tax, with most of that realized by fiscal 2016. It
expects to book $65 million to $85 million of severance-related
charges in the fourth quarter.
The company also forecast its next year of profit, saying it
expects adjusted earnings per share to range from $4.40 to $4.50.
Analysts polled by Thomson Reuters had expected $4.20 a share of
adjusted earnings.
Citrix makes workplace software that allows employees to work
from their own desktops or mobile devices off a centralized data
center, which is known as virtualization.
Write to Nathan Becker at nathan.becker@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 17, 2015 16:42 ET (21:42 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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