Citrix tells GoTo arm where to go

Vendor also planning to cut 1,000 roles as it seeks to save $200m in costs

Citrix is aiming to shave $200m off its cost base by spinning off its GoTo arm and axing 1,000 jobs across the remainder of its workforce.

The virtualisation vendor announced that its GoTo range of Software-as-a-Service (SaaS) products are to be housed in a newly created and separate publicly traded entity. The split – which will affect the GoToAssist, GoToMeeting, GoToMyPC, GoToTraining, GoToWebinar, Grasshopper and OpenVoice products – is scheduled to happen in the second half of next year.

Citrix claims the move is intended to be "a tax-free spinoff" to existing shareholders, who will own shares in both companies following the separation. The GoTo arm turned over $600m in the 12-month period to 30 September.

Bob Calderoni, interim chief executive at Citrix, said: "Upon review, it is clear to us that the GoTo family of products is best suited to grow and operate as a standalone business. This separation will create a leading, pure-play SaaS company that will have a targeted focus with the flexibility to invest in its portfolio of products. It will also allow Citrix to refocus and amplify investment in our core mission to enable secure and reliable delivery of apps and data for the modern enterprise. We look forward to a seamless transition for our employees, customers, partners and other key stakeholders."

The vendor has also announced that, following a review of its operations, it will undertake an exercise in "realignment of resources" that it expects will result in the loss of 1,000 full-time and contract staff across its global operations – equating to about one in 10 of its employees. The cuts will mostly be made this month and in January 2016. As of the start of this calendar year Citrix had a total of 10,081 employees.

A company statement said: "The restructuring will focus on simplification of the company's enterprise go-to-market motion and roles while improving coverage, reflect changes in the company's product focus, and balance resources with demand across the company's marketing, general and administration areas."

The firm believes its actions will ultimately result in an annual total of $200m in pre-tax savings, three quarters of which will be realised in its 2016 fiscal year. However, Citrix is also bracing for between $65m and $85m in pre-tax charges in relation to severance pay for the employees it is to let go.

"We are simplifying our business in all areas – product, marketing, sales, operations and development," added Calderoni.