Citrix spinning off GoTo collaboration business, laying off 1,000 people

The company will focus on the secure delivery of apps and data

Citrix Systems has decided to spin off its GoTo collaboration products business into a new company, to focus on its core business in the secure delivery of apps and data.

The mobile workspaces company expects to completely separate the GoTo business, consisting of products like GoToMeeting, GoToAssist, GoToWebinar, OpenVoice, Grasshopper and GoToMyPC, into a separate publicly traded company by the second half of next year.

For the trailing twelve months ended Sept. 30, unaudited revenue from the GoTo products and services was about US$600 million.

The initial results of Citrix's operations review, which were announced Tuesday, also involves a "realignment of resources" that is expected to eliminate about 1,000 full-time and contract roles, over and above the effect of spinning off the GoTo business. Most of the layoffs and refocusing of resources are expected in November and in January 2016.

The review follows an agreement in July with investment firm Elliott Management whose affiliated funds own about 7.5 percent of the company's common stock. Elliott is said to have asked the company to trim down its business, according to reports. The company's CEO and president, Mark Templeton, retired last month as part of a plan announced in July.

The company plans to now increase emphasis and focus its resources on core enterprise products for secure application and data delivery, including its XenApp, XenDesktop, XenMobile, ShareFile and NetScaler.

The separation of GoTo will create a pure-play SaaS (Software-as-a-Service) company that will have a targeted focus with the flexibility to invest in its portfolio of products, said Bob Calderoni, interim CEO and president and executive chairman of Citrix. The GoTo family of products is best suited to grow and operate as a standalone business, he said in a statement.

Citrix reported revenue of $813 million in the quarter ended Sept. 30 for a profit of $56 million. After an earlier restructuring starting February, the company cut 700 full-time positions in the first half of this year.

In January, Citrix acquired Sanbolic, a vendor of storage virtualization technologies, aiming to offer technologies that will reduce the complexity of Microsoft Windows application delivery and desktop virtualization deployments. It also acquired later Grasshopper Group, a cloud-based telephony technologies company targeting small businesses, whose product fitted in the GoTo collaboration business.

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John Ribeiro

IDG News Service
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