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Cloud Software Group confirms 15 percent headcount cut

CEO of Citrix/TIBCO mashup says company has 'strong foundation' and rolls out the Broadcom playbook of focusing on 'top customers'

The Cloud Software Group, the mashup of Citrix and TIBCO, has confirmed it made at least one thousand staff redundant yesterday.

A "CEO Update" penned by boss Tom Krause states that the biz yesterday "notified roughly 15% of the total Cloud Software Group workforce that their roles have been eliminated or made redundant as part of our planning process for the new company."

Citrix's most recent annual report mentions headcount of 9,700, and Tibco is thought to have had around 4,000 staff – suggesting up to 2,000 redundancies is possible.

Krause wrote that some of the cuts were made in the name of "Eliminating role redundancies in corporate functions and shared services as we operate as a combined business." The rationale for others was "flattening our organizational structure dramatically to drive far greater accountability."

Which sounds like back-office teams and middle management were the focus of the firings.

Krause's post also details the following reasons for the cuts:

  • Focusing more of our internal resources on our top customers and the product roadmaps that align to those customers;
  • Investing more heavily in product development within our refined product roadmaps, and eliminating resources dedicated to other non-essential areas;
  • Investing more in support to improve customer satisfaction;
  • Simplifying our internal processes, programs, and systems and the management and administration roles needed to support them.

The first point is almost identical to the strategy Krause employed when he led Broadcom Software, which unashamedly focused on large customers even if that meant smaller users felt unloved. Broadcom also hiked prices – sometimes as a strategy to deter smaller customers so it could focus on larger accounts.

Krause's post also mentions a plan to "to invest more in our core products" – but doesn't name them.

The CEO did, however, mention that a review of the company's products was conducted.

"We now know where we are investing in the next year, what we need to accomplish in each area of the business, and what we should be focused on as a team," he wrote.

"As a result of this discipline, we will have better predictability in our business results, with more realistic plans and targets that keep the business on track."

Krause thanked the staff who were let go and wrote that the decisions to do so "were not taken lightly."

"Rather, they were practical business decisions designed to strengthen the combined companies. As a leader, these are the toughest types of decisions to make. But our actions yesterday set us up for growth in the future."

The CEO concluded by stating: "We have established a foundation from which we can build a tremendous amount of value for our customers, giving us the cash flow to invest in our products, technology, and the future acquisitions that will put Cloud Software Group on a path to becoming one of the largest software companies in the world."

But just what that future version of the org will emphasize, or sell, remains unknown. As does which products are not considered "core".

If you're a Citrix or Tibco customer and learn that the product you use is considered non-core, feel free to let me know. ®

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