Citrix said Tuesday that it will spin off its GoTo family of products as a separate company, double down on its enterprise business and restructure in a move that will cut 1,000 full-time and contract jobs.
The company said last month that it would consider strategic options and named Robert Calderoni interim CEO. On a conference call with analysts, Calderoni said:
Our Litmus test was simple. If a product investment or function was tied directly to the strategy, we retained in it, or invested heavily in it. If it was not tied to the strategy, we developed a plan to exit it, phase it out, or eliminate it altogether.
Here are the moving parts:
- Citrix will spin off GoTo as an independent company. Chris Hylen, who is the general manager of Citrix's mobility apps unit, will be CEO. GoTo's annual revenue is about $600 million. The company added that the spin off will happen in the second half of 2016. Citrix shareholders will have shares of two companies. The products included in the spin-off include GoToAssist, GoToMeeting, GoToMyPC, GoToTraining, GoToWebinar, Grasshopper and OpenVoice.
- Resources will be focused on Citrix's enterprise unit, which includes XenApp, XenDesktop, XenMobile, ShareFile and NetScaler. Citrix said it will cut other products and fold technologies into its strategic products. To bolster Citrix's marketing effort to corporations, the company named Tim Minahan as chief marketing officer. Minahan was most recently CMO of SAP Cloud. He will report to Calderoni. Both are veterans of Ariba, which was acquired by SAP.
- The company will also cut 1,000 full-time and contract jobs excluding the GoTo spin-off. The restructuring will happen this month and in January.
When the moves are complete, Citrix said it will save $200 million a year in costs and 75 percent of those savings will be booked in fiscal 2016. Employee severance costs will be $65 million to $85 million in the fourth quarter and fiscal 2016.
According to Citrix, the revamped company will deliver revenue growth of 1 percent to 2 percent and have an operating margin of 17 percent. Earnings will be $4.40 to $4.50 on a non-GAAP basis and excluding various restructuring charges and a goodwill write-down.
For 2017, Citrix sees revenue growth of 4 percent to 5 percent with a non-GAAP operating margin of at least 30 percent.