Citrix Systems announced the initial results of its operations review. Immediate actions include rationalizing the company's current product portfolio, realigning and optimizing operations and resources, and a restructuring of its labor force.
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Key conclusions and initial plans from the company's operational review include:
A determination that a spinoff of the GoTo family of products into a separate public company is in the best interest of all stakeholders, allowing both companies to enhance its strategic focus and respective competitive positions, while permitting Citrix to improve operational efficiency.
Plans to increase emphasis and resources to core enterprise products for secure and reliable application and data delivery, including XenApp, XenDesktop, XenMobile, ShareFile and NetScaler.
To achieve this focus, the company will end investment in certain other products and programs, in some cases moving technologies into strategic products, in other cases providing an orderly end-of-life to non-core products.
The evaluation of all products, technologies, offerings and programs is ongoing, and will focus on enterprise readiness, ability to drive customer value, and growth and profitability prospects.
A realignment of resources that is expected to eliminate about 1,000 full-time and contract roles, excluding the effect of spinning off the GoTo business.
The restructuring will focus on simplification of the company's enterprise go-to-market motion and roles while improving coverage, reflect changes in the company's product focus, and balance resources with demand across the company's marketing, general and administration areas. The majority of these actions will take place in November 2015 and in January 2016.
As a result of these actions, Citrix said it expects to achieve approximately $200 million in annualized pre-tax cost savings, with approximately 75% of those cost savings anticipated to be realized in fiscal year 2016.
Citrix currently expects to incur pre-tax charges in the range of approximately $65 million to $85 million related to employee severance arrangements during the fourth quarter of fiscal year 2015 and during fiscal year 2016. ■