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Reports of Citrix layoffs may be overblown

Citrix responded to a report of substantial layoffs that a few positions were eliminated during a marketing restructuring and that no leadership or C-level positions were affected.

Recent news of deep layoffs at Citrix -- including at the senior level -- has likely been overblown.

A story in The Register reported rumors of Citrix layoffs across the U.S. that included senior positions. It stated Citrix was "mysteriously quiet amid whisperings of senior layoffs."

In a statement to SearchVirtualDesktop, Citrix acknowledged some layoffs did occur within the marketing department.

"Some marketing functions changed their organization to better accomplish their new goals, and that included eliminating some positions," Karen Master, senior director of corporate communications and media relations, wrote in an email. She said that 25 positions were affected and, in a follow-up email, that the "restructuring was confined to marketing and no C-level or top leadership positions were eliminated."

Eric Klein, director at VDC Research Group Inc. in Natick, Mass., wasn't surprised to hear that Citrix was restructuring its marketing department. He noted that the company is in the midst of a significant transition in how it sells and markets its cloud-based software products, and it may have overextended its marketing capacity.

"I would say that the thing that has bitten them a little bit in my estimation is Citrix was too aggressive in growing its marketing organization, hence the need to cut it back a bit," Klein said.

I would say that the thing that has bitten them a little bit in my estimation is Citrix was too aggressive in growing its marketing organization, hence the need to cut it back a bit.
Eric KleinDirector, VDC Research

Still, laying off a handful of midlevel positions may signal the overexuberance of a company trying to sell a subscription-based product to a customer base used to on-premises software, according to Klein.

"Citrix has been making adjustments and has gone all-in on the cloud, like many others," Klein said. "They made adjustments and are changing the way their customers buy their products. That's not unique to them."

Klein added that other moves by Citrix, such as the acquisition of Sapho, are intended to help the company strengthen its subscription-based products. The layoffs and the reining in of the marketing budget as Citrix continues this transition may signal that the efforts haven't worked.

"There have been warning signals," Klein said, adding that he noticed a substantial Citrix presence at Mobile World Congress in 2018, and that presence was much more restrained this year. "It was a little surprising to me. That's a large, prominent vendor, and that's a show you make your presence known at."

Citrix is at a pivotal point in its life, according to Klein. It's working to transform itself from a market leader in on-premises computing into a market leader for end-user computing and virtual computing. It's not alone. Microsoft is also continuing its foray into virtual computing, working both as a full-time partner of Citrix and a part-time competitor.

The layoffs weren't the only Citrix rumor this week. Yesterday, the New York Post reported rumors that Citrix is entertaining the idea of putting itself up for sale. Citrix didn't comment on the Post story but is reportedly bringing in Goldman Sachs to explore options, something Citrix has done in the past.

Still, Klein has seen the necessary steps from Citrix to remain bullish that it can pull off this transformation.

"As far as the messaging and roadmap that I've seen from them in analyst-only events, they're on the right path in evolving their messaging and value proposition," he said. "They're going all-in on Workspace and innovating on that platform in a way that's unique in the market. They had a well-staffed marketing team, and it's not surprising to see people snipped. It's unfortunate, certainly."

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