Citrix posts decent financials but decimates staff anyway

SERVER VIRTUALISATION software maker Citrix has decided to lay off 10 per cent of its workforce, despite posting pretty decent financial results for its fourth quarter.

When business slowed for Citrix back in July 2008, the firm immediately implemented a series of cost-cutting measures, which it says helped it to keep its head more or less above water in the current recession.

Citrix posted $416 million in sales for Q408, up four per cent from the previous year and posted 14 per cent revenue growth for the full year, some $1.58 billion. The firm also reported its net income as $60 million, only down 4.8 per cent from the previous year which, in view of the current financial mess, is pretty respectable.

Not respectable enough for Citrix to reward its loyal employees, however, with the company announcing yesterday a full 10 per cent of the 4,600 strong workforce would be handed their marching orders.

In a call to analysts yesterday, Citrix president and CEO, Mark Templeton, noted that on top of the layoffs, management positions spanning all divisions and geographies, would be 'consolidated'.

Templeton also said Citrix would be cutting back on contract workers and employee travel whilst freezing merit based pay rises for the firm's officers and vice presidents. Other employee pay rises will be pushed back to the fourth quarter of 2009 and Citrix will purportedly now be moving to prioritise its internal projects.

Templeton noted the layoffs would save Citrix about $50 million a year, after charges of between $19m to $23m, which the firm says it will absorb in the first quarter of 2009. Despite the bleak outlook and its decision to make hundreds of employees redundant, the firm isn't particularly worried about its future, claiming to have $533 million in deferred revenues and $575m in cash and short-term investments. µ