[THIN] Re: ARTICLE: Citrix to pink slip 10 per cent
- From: "Shannon Wyatt" <swyatt@xxxxxxx>
- To: <thin@xxxxxxxxxxxxx>
- Date: Fri, 19 Jul 2002 08:34:43 -0400
Yes, it seems that they learned their economics from the government!
-----Original Message-----
From: thin-bounce@xxxxxxxxxxxxx [mailto:thin-bounce@xxxxxxxxxxxxx] On
Behalf Of Doyle, Kevin
Sent: Friday, July 19, 2002 8:14 AM
To: 'thin@xxxxxxxxxxxxx'
Subject: [THIN] Re: ARTICLE: Citrix to pink slip 10 per cent
Gee...raise prices and demand from small businesses (and govt. agencies)
decline.... Someone needs an economics refresher.
-----Original Message-----
From: Jim Kenzig http://thethin.net [mailto:jimkenz@xxxxxxxxxxxxxx]
Sent: Thursday, July 18, 2002 4:50 PM
To: thin@xxxxxxxxxxxxx
Subject: [THIN] ARTICLE: Citrix to pink slip 10 per cent
From theregister...hmmm.
JK
Citrix to pink slip 10 per cent
By IT Analysis
Posted: 15/07/2002 at 09:33 GMT
http://www.theregister.co.uk/content/53/26186.html
With its Q2 figures due to be announced on July 17th, Citrix has given a
broad hint as to the likely outcome and is pre-empting the results by
announcing that it expects to layoff around 10 percent of its staff.
This time last year, Citrix earned revenues of $147 million for the
second quarter. The expectation for 2002 is somewhere between $116
million and $118 million. Profits will dip from 12 cents per share to
somewhere between 5 and 6 cents. This may be adjusted to exclude
amortization charges and write-offs, giving earnings of between 6 and 7
cents per share.
Citrix is not seeing this as a temporary blip. The estimate for Q3
revenues is set between $110 million and $115 million and the full year
figures are expected to come in at around $490 million. It is not
surprising, therefore, that it has felt the need to take quick action.
The immediate consequence of the reduced profitability is that the
world-wide headcount will be reduced by 10 percent. It is believed that
the current staffing levels are just below 2000 and so we can expect 200
job losses to occur. In addition to this, there will be a significant
reduction in sales and marketing expenses but will focus more on direct
sales, so it shouldn't be too difficult to work out where the lay-offs
will be focussed.
The interesting part of the announcement, made by President and CEO,
Mark Templeton, is his analysis of where things might be going wrong.
The indications are that revenues from electronic licenses and software
subscriptions are increasing by 15 percent. The problem seems to lie in
the acquisition of new small customers.
This is an area where Citrix has, traditionally, done reasonably well as
small business look to MetaFrame as a solution to their terminal server
requirements. In times of hardship, it seems, that they turn to the free
of charge option from Microsoft. Microsoft Terminal Server is another of
those bundled layers that offers the connectivity options that these
small businesses need but without some of the added value that Citrix
usually looks to provide.
Templeton expects that these companies will, eventually turn to Citrix
once they realise that they need that extra value. This has the effect
of lengthening the sales cycle for Citrix - in the shrink-wrap market
that usually has no sales cycle at all.
Does this mean that one quarter or two quarters down the road, we should
see those revenue levels picking up again as the Microsoft Terminal
Server users move across to MetaFrame? Clearly the next quarter
prediction doesn't assume so. The problem may be a long-term issue and
maybe Citrix needs to do something to maintain the attention of that
audience.
Shame about those marketing staff.
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