Layoffs at Citrix: fresh start or beginning of the end?
Citrix is reorganizing its businesses and is making cuts in its workforce.
Citrix is reorganizing its businesses following the nomination of David Henshall as CEO in July and a makeover of its executive staff on September 22 where Mark Ferrer (former SAP) has been appointed Vice President and Ajei Gopal has been appointed to the Board. We talked with Henshall in a two-part article about the previous changes at Citrix and the challenges facing Citrix right now. It was expected from the new CEO to make changes but the scale surprised many Citrites.
It all started on Wednesday morning with rumors of massive and global layoffs at Citrix Sharefile’s home in Raleigh, NC. Quickly the rumors were confirmed by a few articles from BizJournals.com and an official statement from Citrix spokesperson, Eric Armstrong.
You can check a comprehensive summary of the cuts in the workforce at Citrix posted by Gabe Knuth . Citrix has provisioned up to $70 million for severance, close to the same amount that was provisioned in 2015 ($65 million to $85 million) when 1,000 employees were laid off.
According to the filing, it seems that 10% of the workforce was impacted by this wave of layoffs including many key and irreplaceable long-time Citrites.
First, I’d like to take the time to show support for all Citrites who lost their jobs. We tend to forget in our capitalist society that families are heavily disrupted by layoffs. It is also an opportunity to see some good-hearted actions, like the founder of ShareFile Jesse Lipson, who pledged to help people let go from the ShareFile team by Citrix. Also, many people have offered their help on Twitter.
This reorg demonstrates that Citrix is pushing the Enterprise Cloud initiative for all its products even further, especially for XenMobile, ignoring—once-again—its on-premises deployments. According to Citrix, a subscription model is the future, and they will allocate resources where the growth is. This is a massive pivot for its customers and Citrix must be ahead of their needs.
We also learned that Citrix gave up on OctoBlu and that its future will be determined in the coming weeks and months. It is a sad but unsurprising end for this awesome platform, acquired by Citrix in December 2014. The excitement is there for Octoblu, but only from a small group of people. Most customers did not understand the benefits of this platform and Citrix did not do a great job to promote/integrate it. RIP Octoblu, probably nothing will happen with the product (as many devs were let go). It will just die in a slow and painful way.
ShareFile was the most impacted by the Citrix layoffs. The goal is to refocus the business on Enterprise solutions, where before they targeted small to mid-sized corporations. Citrix will also allocate resources to integrate Right Signature into ShareFile. The package of ShareFile, Podio and Right Signature seems to make sense.
Unidesk, the latest purchase of Citrix in January 2017, was also impacted, but only in the sales department. We can expect Citrix to continue to invest in Unidesk and work on its complete integration within its products to finally deliver a common platform between MCS, PVS and App Layering.
The Cloud first strategy extends to XenMobile. Citrix plans to reduce its investments to on-premises XenMobile features and reallocate the money to Cloud developments. If you are currently working on deploying Citrix XenMobile on prem, you should reconsider it as soon as possible. More broadly, XenMobile is on life support. Clearly the product is not winning and has been distanced by VMware Airwatch, Microsoft InTune and even Blackberry UEM. At this point, Citrix should just partner with Microsoft and build on top of InTune.
The good news,if any, is that Citrix has reaffirmed its support for the core products, the ones where the money is coming from. XenDesktop, XenApp, XenServer and NetScaler are safe and were mostly not impacted (except the HDX team). The strategy for those products will remain the same.
As the CEO of Citrix, David Henshall has the duty to take tough decisions to keep to company alive. We cannot blame him, as he is probably not happy of having to make those cuts. I’ve read that some think that Tatarinov could have been fired for refusing to proceed with the layoffs but we will never know. We received some reports that the management has assured that no layoffs would occur in December this year, but employees are dubious.
Unfortunately, reorganizations are common in large corporations and Citrix already reduced its workforce as recently as November 2015. During this last round of layoffs, Citrix released an official statement with figures—but they did not do the same this time which has led to speculations, especially on Twitter. The timing of the layoffs was also not the best, as Citrix was having its Solution Day on the same day in Barneveld. This has led to heated exchanges, like this one between Christian Reilly (@reillyusa) and Warren Simondson (@Caditc) via Twitter.
Warren was really mad at Citrix, even taking direct jab at Citrix CEO David Henshall.
Citrix could have managed this better and must improve its PR to take the control of public perception if they don’t want to lose customers by showing a lack of direction and focus.
It will take months if not years for Citrix executives to gain that trust back from the remaining employees. In the meantime, the obvious next step for Citrix is to be acquired. We already discussed a sale few months ago and the perspective of Citrix falling into darkness has never been higher.
What is the future for this once great company and its people? Please share your thoughts in the comments.