Citrix-Tibco 2022 layoffs: Software merger includes 1,000 planned staff cuts

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Citrix Systems and Tibco Software plan to lay off about 1,000 employees once the software companies merge in late September, Bloomberg reported.

Citrix has 10,316 employees listed on LinkedIn, while Tibco has 4,794 employees listed as of September 11, 2022.

The merger, overseen by private equity firms Vista Equity Partners and Elliott Investment Management, will take Citrix private and merge the company with Tibco. The combined software company will serve 400,000 customers, including 98% of the Fortune 500, with 100 million users in 100 countries, buyers said earlier this year.

The $16.5 billion Citrix buyout, announced in January 2022, apparently overcame a $15 billion debt financing challenge, and the Citrix-Tibco merger now looks set to close in late September 2022, according to an SEC filing.

Related: See all the tech industry layoffs listed here.

Citrix layoffs, sale of Wrike assets?

Part of the financial model may include the sale of Wrike by Citrix, a protection management software startup that Citrix acquired from Vista for $2.25 billion in 2021, Bloomberg reported.

On the cost-cutting front, Bloomberg said:

  • Citrix and Tibco plan to reduce costs by $371 million per year;
  • that includes one-time costs of about $200 million and 955 layoffs, including cuts of about 450 sales and marketing jobs.

Prior to the deal, Citrix turns to cloud subscription services – with mixed results. Indeed, the financial results for the fourth quarter of 2021 included:

  • Revenue of $851 million, up 5% from the fourth quarter of 2020.
  • Net income of $103 million, down from $112 million in the fourth quarter of 2020.

Citrix Business Challenges: DaaS, VDI, and Nerdio Competition

Citrix takeover rumors had been swirling since September 2021, and they intensified after a CEO change in October 2021 and Citrix layoffs in November 2021.

Among the challenges Citrix faces: Enterprise desktop as a service (DaaS) and virtual desktop infrastructure (VDI) are under pressure from public clouds such as Microsoft Azure, Amazon Web Services and Google Cloud Platform .

More recently, Citrix has come under pressure from Microsoft Windows 365, ChannelE2E believes. Indeed, thousands of MSPs have flocked to Microsoft’s DaaS software stack. In many cases, these MSPs are working with Nerdio to explore Microsoft Windows 365 business opportunities.

Private Equity and Debt Financing: Recent Obstacles

Meanwhile, the sale of Citrix’s debt associated with the company takeover has taken more work than originally anticipated due to rising interest rates and falling valuations of software makers.

Read between the lines and there’s an important lesson here for MSPs, MSSPs, tech and cybersecurity companies. Indeed, private equity firms can appear to have endless cash ready for further acquisitions. But the reality is quite different in many deals – where private equity firms and bankers are working overtime to adjust their financial plans and debt financing for buyouts.

After some initial hurdles, banks seeking to sell some of the debt backing the Citrix deal have received more demand than they can meet, raising the possibility that they will suffer a smaller loss than expected. reported Reuters.

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