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Citrix to Lay Off 1,000 Employees, Create GoTo Business Spinoff

Citrix Systems, Inc. plans to lay off about 1,000 employees and spin off its GoToMeeting products as a separate publicly traded business, the cloud-based software company announced Tuesday.

The restructuring news comes as the Santa Clara-based company with regional headquarters around the globe — including one in Goleta at 7414 Hollister Ave. — released initial results of its operations review.

There was no word Tuesday night on where employees would be eliminated, but affected workers can expect notices this month or in January. As of Thursday, fewer than five Goleta employees had been given layoff notices, according to company spokeswoman Julie Geer.

Citrix, which was founded in 1989, has about 10,000 employees worldwide, 600 of whom are in Goleta focused on the company's GoTo business, Geer said.

Citrix hopes to focus on its core strategy of providing secure and reliable delivery of applications and data to build “a more effective, scalable and profitable company.”

The layoff numbers do not include the planned spin off of Citrix’s GoTo business into a publicly traded company, which would take on a yet-to-be determined name and be completed in the second half of 2016 pending final approval from the U.S. Securities and Exchange Commission.

Geer said Citrix might have more information about layoffs later this week.

"We’ve completed a bottom-up analysis of each function in the company — to identify opportunities to reduce layers, consolidate duplicate functions, and reduce the reliance on temporary and contract labor," she said in an email. 

GoTo products provide HD video conferencing and related tools on desktops, laptops, mobile phones and more to over 400,000 organizations and upwards of 100 million users.

Citrex’s annual revenue in 2014 was $3.14 billion, according to the company.

“Upon review, it is clear to us that the GoTo family of products is best suited to grow and operate as a standalone business,” Bob Calderoni, interim CEO and president and executive chairman of Citrix, said in a statement.

“This separation will create a leading, pure-play SaaS company that will have a targeted focus with the flexibility to invest in its portfolio of products.

“It will also allow Citrix to refocus and amplify investment in our core mission to enable secure and reliable delivery of apps and data for the modern enterprise. We look forward to a seamless transition for our employees, customers, partners and other key stakeholders.”

Chris Hylen, who joined Citrix in 2013 as senior vice president and general manager of the Citrix Mobility Apps Business Unit, will serve as CEO of the new company.

The spin-off will be made up of GoToAssist,  GoToMeeting, GoToMyPC, GoToTraining, GoToWebinar, Grasshopper and OpenVoice technologies.

Eliminated jobs will reflect changes in product focus. Citrix says it will attempt to balance resources with demand across marketing, general and administrative areas.

"As with many companies of our size and scale, our business had grown too broad and complex," Geer said. "And this was getting in the way of our execution, diluting our investments, and, often times, confusing customers and partners.

"Quite simply, our goal with this operational review was to simplify the business to position us for profitable growth, long-term competitive advantage, and to make it easier for our customers and partners to buy and adopt our great products."

Citrix was still evaluating its products to see which to ditch, but has already decided to increase emphasis and resources on XenApp, XenDesktop, XenMobile, ShareFile and NetScaler.

The company expects to pay out $65 million to $85 million total related to employee severance arrangements.

With changes, Citrix anticipates achieving approximately $200 million in annualized pre-tax cost savings, with 75 percent of those savings realized in the 2016 fiscal year.

“We are simplifying our business in all areas – product, marketing, sales, operations and development,” Calderoni 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.”

Noozhawk staff writer Gina Potthoff can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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