Citrix's 900 job cuts seen as 'defensive' move
- 30 January, 2015 11:05
Citrix Systems announced better than expected financial results for the last quarter but also a restructuring plan that will see 900 jobs being cut.
The restructuring, which includes the elimination of 700 full-time and 200 contractor positions, is expected to deliver savings of $US90 million to $US100 million per year, Citrix said.
Investors seemed to cheer the news, as Citrix's stock rose as high as $63.27 per share on Thursday, or 7 per cent over the previous day's close.
"I think Citrix's plans qualify as what might be called defensive layoffs," said Charles King, principal analyst with Pund-IT.
The results beat analyst expectations, "but only barely," King noted.
Recent economic trends - including lower oil prices and a strengthening dollar - have caused a number of vendors to make cautionary statements about business performance, particularly for the latter half of the year, he said.
"Though painful, the Citrix headcount reductions are relatively modest and should provide the company some leeway if or when things get tough later on," King added.
Citrix's revenue for the fourth quarter of fiscal 2014 was $US851 million, up 6 per cent year-over-year. For the full year, revenue was $US3.14 billion, up 8 per cent from 2013.
For 2015, Citrix expects revenue between $US3.29 billion and $US3.33 billion, and earnings per share of $US3.60 to $US3.65. Analyst polled by Thomson Financial had predicted earnings of $US3.69 a share on $US3.36 billion in revenue for the year.
The layoffs will cost Citrix up to $45 million in severance this year and up to $10 million related to the consolidation of leased facilities, the company said.