Citrix Systems has laid off about 50 employees from its Raleigh, North Carolina offices amid a recent CEO change, chief product officer departure, up to $240 million in restructuring charges, and speculation about a potential software company sale.
The restructuring details surfaced in an SEC filing. The disclosure mentioned that Chief Product Officer PJ Hough no longer in that role though he remains an advisor to the CEO, effective November 15. The layoffs and restructuring plan surface roughly one month after former Citrix CEO David Henshall exited the company, and two months after reports that Citrix could be up for sale.
Chairman Bob Calderoni has been running Citrix as interim CEO and president since October 2021. Among the challenges Calderoni must address: The company’s desktop as a service (DaaS) and virtual desktop infrastructure (VDI) are under pressure from public clouds such as Microsoft Azure, Amazon Web Services and Google Cloud Platform.
More recently, Citrix has faced pressure from Microsoft Windows 365, ChannelE2E believes. Indeed, thousands of MSPs have been flocking toward Microsoft's home-grown DaaS software stack. In many cases, those MSPs are working with Nerdio to navigate Microsoft Windows 365 business opportunities.
Related: All Technology Industry Company Layoffs In 2021
Citrix Restructuring: Layoffs and Cost Cut Details
The November 2021 Citrix layoffs impacted less than 10% of the company's Raleigh office -- but were part of a larger restructuring within the company, according to The News and Observer.
Overall headcount cuts were not disclosed. But in an SEC filing, Citrix disclosed that the Restructuring Program will include, among other things:
- "The elimination of full-time positions, termination of certain contracts, and asset impairments, primarily related to facilities consolidations."
- An estimated $130 million to $240 million in pre-tax restructuring and asset impairment charges.
The overall cost cuts, according to the SEC filing, will include:
- $65 million to $90 million related to employee severance arrangements;
- $40 million to $75 million related to the impairment of right of use and other assets from the consolidation of facilities;
- $20 million to $35 million in contract termination costs;
- $5 million to $40 million related to the impairment of certain acquired intangible assets and other charges.
Citrix expects to complete the restructuring over an 18-month period, the SEC filing indicated.
Potential Citrix Buyers: Private Equity, Strategic Technology Businesses
So, who could potentially step up to acquire Citrix Systems -- if a deal surfaces? The obvious answer involves private equity companies — many of which are quite familiar with Citrix and its offspring. For instance, Francisco Partners and Evergreen Coast Capital now own LogMeIn — which had swallowed such Citrix brands as GoToConnect and GoToMeeting ahead of the September 2020 private equity deal.
Potential Citrix buyers could also include private equity firms Bain Capital and/or Thoma Bravo, though valuation is a hurdle, Bloomberg suggests.
Elsewhere, ChannelE2E wonders if enterprise technology provider Broadcom would acquire Citrix. After all, Broadcom has a habit of buying older software companies that are deeply entrenched in the enterprise and throw off a lot of cash. Examples include Broadcom buying Symantec’s enterprise security business for $10.7 billion in 2019, and CA Technologies for $18.9 billion in 2018.
