Citrix initiates 'Restructuring Program' – jobs and facilities to go
Sets aside up to $90M just for employee severance packages
Citrix has initiated a "Restructuring Program" under which the company will reduce headcount and close some offices. The Register understands that staff around the world have already been let go.
The application streamer on Monday emitted a regulatory filing that detailed a plan that includes "elimination of full-time positions, termination of certain contracts, and asset impairments, primarily related to facilities consolidations".
The restructure is forecast to result in charges of approximately $130m to $240m, $65m to $90m of which has been set aside to cover employee severance payments.
Another change is a move for Paul Hough, currently executive veep and chief product officer, to become an advisor to interim CEO Robert Calderoni, who took over after the sudden departure of David Henshall.
Calderoni flagged changes on the company's Q3 earnings call, during which he reported year-on-year revenue growth of one per cent, described 2021 as "a trough year for both margins and cash flow" and lamented that some of the company's structures and sales arrangements are not conducive to growth.
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The CEO also described "cash flow headwinds" that came from colossal commissions owed to salespeople who cashed on in COVID-created demand for Citrix's remote working wares. Those payments – about $100 million worth – made for lower margins.
"Clearly we just have to reverse some of the things that we did over the last year or two and make the business more attractive," the interim CEO told investors.
Making things more interesting is that activist investor Elliot Management has reportedly taken a ten per cent stake in the company. Elliot was instrumental in installing Henshall as CEO – a decision that turned Citrix around after difficult years. In April 2020, the management firm was so confident that Citrix was on the right path that its director departed the company's board and signed off saying everything was on track.
Investors appear not to mind the new restructuring plan too much. Citrix's share price is off by three per cent this week, while the NASDAQ exchange that hosts it is up 1.5 per cent. ®