Am I Next? Mass layoffs at Citrix

According to published reports, Citrix may be cleaning up its operation by reducing personnel costs and enhancing profits in order to be more attractive to potential buyers.  According to a recently filed Securities and Exchange Commission report, look ahead to another round of mass layoffs that may equal or exceed the layoff of approximately 1,000 employees in 2015.

Like many underperforming companies, the Citrix CEO, Kirill Tatarinov, was replaced early in his tenure by its CFO David Henshall in July 2017. Some Wall Street analysts suggested that this move might signal an emphasis on profits rather than growth. This is bolstered by the company’s corporate-speak blurb that attributed the move to “a series of strategic initiatives intended to drive operating margin expansion, increase capital return and facilitate further investment in accelerating Citrix’s transformation to a cloud-based subscription business and in high-growth areas, such as data security and analytics services.” Earlier this year reports that Bain Capital, The Carlyle Group, and others were looking to take the company private; but no purchaser is currently in sight. Once again, an activist hedge fund, Elliot Management, seems to be driving the changes.

From the SEC filing … Item 2.05. Costs Associated With Exit or Disposal Activities.

Am I Next? Layoffs at Citrix

Consistent with its previously-announced plans intended to accelerate the transformation to a cloud-based subscription business, increase strategic focus, and improve operational efficiency, on October 4, 2017, Citrix Systems, Inc. (the “Company”) announced a restructuring program to support these initiatives (the “Restructuring Program”). The Restructuring Program will include, among other things, the elimination of full-time positions and facilities consolidation. Any
position elimination proposals in countries outside the United States will be subject to local law and consultation requirements.

The Company currently expects to record in the aggregate approximately $60 million to $100 million in pre-tax restructuring charges associated with the Restructuring Program. Included in these pre-tax charges are approximately $55 million to $70 million related to employee severance arrangements and approximately $5 million to $30 million related to the consolidation of leased facilities and other charges associated with the Restructuring Program. Substantially all of these charges will result in future cash expenditures. The Company currently anticipates completing the majority of the activities related to the Restructuring Program during the fourth quarter of 2017 and during fiscal year 2018.  <Source>

Again, it pays for employees to watch personnel changes, the appearance of activist investors, and SEC announcements.