Cloud software maker Citrix to spin off GoTo business, cut jobs

Reuters News
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Posted: Nov 17, 2015 4:41 PM

(Reuters) - Cloud computing software maker Citrix Systems Inc <CTXS.O>, under pressure from activist hedge fund Elliott Management, said it would spin off its GoTo business into a listed company and cut about 1,000 jobs.

The company's shares were down 3 percent at $76.01 in after-hours trading on Tuesday.

Citrix said in July it would explore strategic alternatives for its GoTo family of products, including videoconferencing and desktop sharing service GoToMeeting.

Elliott in June called on Citrix to sell some units, cut costs and buy back shares to make up for six years of underperformance.

Since then, the stock had gained about 19 percent through Tuesday's close.

Citrix in July agreed to give Jesse Cohn, one of the senior partners at Elliott, a seat on the board.

The job cuts do not include the impact of the spinoff, the company said on Tuesday.

The company said it expects about $200 million in annualized pre-tax cost savings, 75 percent of which is likely to be in 2016.

Citrix also said it would incur pretax charges of about $65 million-$85 million related to the job cuts in the fourth quarter of 2015 and fiscal 2016.

Most of the restructuring would be done in November and in January, the company said.

Citrix also said it expects a 1-2 percent net revenue growth for the year ending December 31 with an adjusted earnings of $4.40-$4.50 per share.

(Reporting by Abhirup Roy in Bengaluru; Editing by Sriraj Kalluvila)