Citrix shocked many this week with its announcement of 900 job cuts, 700 of which were full-time employees and 200 contractors. Although quota sales positions will be less impacted than other departments, the overall 10% reduction throughout the company will no doubt impact engineering, product management, support, and other technical groups upon which architects, administrators, and engineers rely to produce and support virtualization products.
Of course, other companies, including IBM and Microsoft, have announced layoffs recently, so this isn’t isolated just to Citrix. It’s always a very painful process for those affected, in addition to their colleagues. Although Wall Street appears to love to hear about layoffs, the reality is that 900 people, not just jobs, are negatively affected. As with any layoff, at least some of those who do hold onto their jobs are subject to additional workload. They may self-evaluate their continuity once stabilization occurs.
Aside from cost-cutting, Citrix says the purpose of this layoff is “general de-layering across the organization,” as was discussed during the earnings call. This implies that middle management could be the most adversely impacted group. The end goal is to “get fewer layers…[to] get faster decision making.”
Having been through two layoffs during my eleven-year tenure at Citrix, I can confirm that this is certainly a difficult time. The Citrix culture has its highs and lows. When the business is doing well, the euphoria at Citrix is exciting and infectious. Conversely, when layoffs occur, the impact is painful, whether one is directly or indirectly affected. It will take time for Citrix employees to emotionally recover from this layoff, but it’s possible that a newly emerged Citrix with fewer management layers will output innovation and technology to levels comparable to those of the early days of the company. Picture a bright engineer with a great idea for a new product feature, able to move it briskly into development without wasting cycles explaining and re-explaining her idea to multiple layers of management.
For Citrix technical buyers, how does a layoff impact sales and support of the product? Certainly, a layoff gives potential new subscribers reason to reconsider if and how projects should move forward. There will likely be some pauses and delays associated with Citrix-related projects. If the people you were accustomed to dealing with are no longer with Citrix, it will take time to forge relationships with new contacts and get projects back on track. The downstream impact of the layoff may offset the recent announcements related to XenServer 6.5 and feature enhancements to XenApp/XenDesktop.
Ensuring that the client contact points within Citrix are minimally impacted is critical for success. If de-layering is indeed the outcome of this layoff, and Citrix is able to once again focus on its technical roots, the company will be better positioned for the future. That future should include meticulous business decision-making to ensure that de-layered management doesn’t become re-layered after a short period of time.
You can read Simon Bramfit’s article, Citrix Beats Earnings — Still Cuts, for a description of the products cuts.