Citrix Posts Big Losses for 2014, Announces Layoffs
About 900 employees and contractors will be losing their jobs.
While some of its chief rivals in the virtualization and cloud computing space are doing well financially, Citrix Systems Inc. is trending in the opposite direction, with a money-losing 2014, followed quickly by news of large layoffs.
Citrix reported revenue of $3.14 billion for 2014, an increase of 8 percent over 2013 revenue of $2.92 billion. However, net income for 2014 was $252 million, a huge drop from $340 million in 2013. Fourth-quarter 2014 numbers were equally weak: a 6 percent increase in revenues over the previous year, from $802 million to $851 million, but net income of just $95 million, compared to $139 million in Q4 2013.
After detailing the dismal results, Citrix announced -- in the same report -– that it was laying off about 900 people, including about 700 full-timers and 200 contractors. The layoffs are expected to save Citrix in the range of $90 million to $100 million.
That performance stands in marked contrast to the earnings reports earlier in the week from Microsoft and VMware Inc. Microsoft reported an 8 percent increase in revenue for the second quarter of its fiscal year, and its earnings beat analyst expectations. VMware had an even stronger showing for 2014; it set a record, with more than $6 billion in revenue, a 16 percent year-over-year increase. It increased revenues for each quarter in 2014.
Despite the discouraging showing, however, not everything is gloomy for Citrix. It recently announced the acquisition of Sanbolic, a storage virtualization vendor. The purchase was seen by Virtualization Review writers as an excellent buy, as it fills in an important missing gap in the Citrix virtualization lineup.
- Dan's Take columnist Dan Kusnetzky called the Sanbolic acquisition "… a great move by Citrix."
- Take 5 columnist Tom Fenton said it could have a "… transformative effect on Citrix as a company."
- Virtual Insider columnist Elias Khnaser said it was "… a welcome step in the right direction."
Keith Ward is the editor in chief of Virtualization & Cloud Review. Follow him on Twitter @VirtReviewKeith.