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10% of Citrix Virtually Gone

Plans staff cuts and consolidations in hopes of saving $50M a year

Citrix, VMware's rival, is going to cut 10% of its staff, about 460 people give or take as well as consolidate facilities and reduce contract workers to save $50 million a year. It said so when its Q4 results turned out to be worse than expected and projected that Q1 will be down 5% sequentially.

At $415.7 million, Q4 revenues - though up 4% - were decidedly less than the $432 million and change Wall Street was expecting. The company's non-GAAP earnings of 48 cents a share were a penny better than expected. In GAAP terms it made $62.8 million, or 33 cents a share.

If the company's Q1 estimates are right it'll come in with around $395 million in revenues when the analysts were modeling $401.5 million, up 7%, which may explain why Citrix' stock took a ~10% hit. It said it would take a $19 million-$23 million restructuring charge this quarter.

The company said its core XenApp application virtualization revenues dropped 3% in Q4 because clients delayed or severely reduced projects, with million-dollar deals taking the hit along with very small ones. Licenses were down 15% year-over-year.

XenServer and XenDesktop virtualization revenues were up 40% sequentially to $9 million, but fell short of the company's full-year target of $25 million.

Citrix' application networking business, on the other hand, was up 13% in Q3 to $54 million but muted by the declines in customers' web traffic growth and e-commerce sales.

The company described its SaaS revenues from GoToMeeting and GoToMyPC as up 18% to $69 million.

Citrix said overall license revenues dropped 9% to $162 million. Geographically it had the most trouble in the Pacific, down 6% to $31 million. Elsewhere it was up marginally.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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