Citrix Parent CEO: 15 Percent Of Workforce Cut, Layoffs ‘Designed To Strengthen’ CSG
Wade Tyler Millward
‘Please know that these decisions were not taken lightly,’ Cloud Software Group CEO Tom Krause said in an online post Wednesday.
Tom Krause, CEO of Citrix and Tibco parent company Cloud Software Group, confirmed that CSG cut about 15 percent of its workforce in an effort to build a more streamlined company with cash to invest in products, technology and acquisitions in an increasingly competitive cloud market.
In an online post Wednesday, Krause said that CSG cut redundant corporate roles at Citrix and Tibco, with plans to put more focus on top customers and to invest more in “customer satisfaction” and product development, eliminating resources for “other non-essential areas.”
CRN Tuesday reported that CSG had begun laying off thousands of employees throughout the organization as the company worked toward plans for Citrix to focus on its top 1,000 customers, leaving mid-tier and commercial accounts to be supported and serviced by solution providers.
A source familiar with the situation told CRN Wednesday that the cuts impacted approximately 2,000 jobs.
CRN has reached out to CSG for comment.
The company sought to simplify its internal processes, programs, systems, management and administration roles, conducting a three-month review process before Tuesday’s layoffs, Krause said in the post. The company’s remaining employees will focus more on top customers and product roadmaps aligned to those customers. The changes ready CSG for more predictable business results and “more realistic plans and targets that keep the business on track.”
“To the individuals who were impacted, I want to personally thank you for your contributions to Citrix and Tibco,” Krause said. “Please know that these decisions 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.”
He continued: “To get to where I know this company can go requires us to completely rethink how we operate and organize at every level of the business and rebuild our go-forward plans looking to the future instead of the past. … While there are significant impacts to the organization, many that have been painful for the teams this week, I am confident in our new business model.”
Citrix employees who took to LinkedIn to say they were laid off from the company include a lead NetScaler sales engineer who had been with Citrix for about 22 years; a territory manager for Citrix; a networking, application delivery and security specialist for Florida and Georgia commercial field sales; a senior sales engineering manager who’d worked with Citrix for about 15 years; a software engineer; and an enterprise application delivery and security specialist.
CSG’s website Wednesday listed 125 open positions at the company. That included 12 roles in product development, 14 in sales, 14 in customer success and support and 10 in marketing. About 90 roles are in the U.S., 28 are in India and one is in Australia. Almost 60 roles relate to ShareFile, 55 relate to Citrix, 10 relate to Tibco, and one relates to NetScaler. None of the positions are explicitly labeled as remote jobs.
Krause Came From Broadcom
Krause started the CEO job—leaving Broadcom as the chipmaker was acquiring Citrix competitor VMware—in September.
He took the job knowing “there would be difficult decisions to make,” he said in the post. Krause said that CSG “has enormous potential and an opportunity to become one of the global leaders in delivering mission-critical enterprise software at scale.”
One CSG employee whose job was cut told CRN that Krause’s post “feels like it was an explanation more directed to customers than the affected employees.”
Another impacted employee said that the layoffs left him crying most of Tuesday, when many employees found out they were losing their jobs. But the outreach from former colleagues “has been a total blessing.”
The person said they hope their next employer values them more and doesn’t just consider them “a number.”
“Today I feel confident that the loss is to CSG and at a benefit to me,” the person told CRN.
The changes come four months after the acquisition of Citrix in September for $16.5 billion. Investment firms Vista Equity Partners and Evergreen Coast Capital—an affiliate of Elliott Investment Management—took Fort Lauderdale, Fla.-based Citrix private, merged it with Palo Alto, Calif.-based Tibco and created a new parent organization, CSG.
Market Changes Afoot
The virtual desktop industry has gotten more competitive for Citrix and VMware as cloud giants such as Amazon Web Services and Microsoft have rolled out similar services and turned to third-party vendors to keep users within the hyperscalers’ environments.
The tech industry as a whole has been hit by a wave of cutbacks as the sector grapples with inflation and rising interest rates in the U.S. and concerns over a possible global recession. Salesforce, Cisco, HP, Intel, Elastic, Aqua Security, AvePoint and N-able are some of the vendors to announce cuts recently.
Earlier this month, Citrix named Ethan Fitzsimons its new channel chief and promised a “more predictable” and “more profitable” partner program, set to launch on March. 6 for Citrix partners. Tibco partners will not be affected by those changes.
“It’s about how do we allow [partners] to do their job faster, easier, simpler,” Fitzsimons told CRN at the time. “How can we be simpler to work with? More predictable. More profitable. And really remove any of the inhibitors—in most cases, artificial inhibitors—that were slowing down the pace of business that we could do with our partners. … We allowed ourselves to become a little bit too complex when it came to our partner program. … That’s feedback that I received from our partners consistently.”
Mike Strohl, CEO of Concord, Calif.-based Citrix partner E360—No. 111 on CRN’s 2022 Solution Provider 500—told CRN Tuesday that some CSG people he has worked with have been impacted.
Nevertheless, Strohl said that he is still confident in Citrix’s channel leadership, including Fitzsimons; Hector Lima, CSG’s executive vice president of field and channel sales; and Mike Fouts, CSG’s vice president of global service providers.
“The core DNA of what makes Citrix Citrix lives within those guys,” he said. “I fully believe in what they’re doing.”
Strohl said he is happy with the upcoming partner program changes he has heard about from Citrix.
“We’re most excited about the Citrix [Service Provider] program [changes] and what we can bring to market collectively with our customers,” he said. “There’s actually been a lot of work done on Citrix’s part to make that a much better and more-aligned go-to-market” motion.