The continuing onslaught of tech layoffs has not let up in the new year. Last week, we saw big layoff announcements from Amazon and Salesforce with thousands of employees being let go. Yesterday CRN reported that Cloud Software Group was undertaking massive layoffs. Today the company confirmed it was laying off 15% of the workforce.
Although the company would not share just how many people were involved, it appears to be in the thousands.
Cloud Software Group was formed last year after PE firms Vista Equity Partners and Evergreen Coast Capital (an affiliate of Elliott Investment Management) took Citrix private in a $16.5 billion deal, the third biggest enterprise M&A deal of last year. At the time, the firms indicated they would be combining Citrix with Tibco, another enterprise firm that Vista had purchased previously.
In a post published today from CEO Tom Krause, who was put in charge when the combined company was formed, he confirmed that layoffs had indeed happened. “Yesterday, we notified roughly 15% of the total Cloud Software Group workforce that their roles have been eliminated or made redundant as part of our planning process for the new company,” he said, not pulling any punches.
Krause wrote that layoffs are among the toughest decisions any executive has to make, and he acknowledged the pain that comes with these moves. “Please know that these decisions were not taken lightly. Rather, they were practical business decisions designed to strengthen the combined companies,” he wrote.
When Vista and Elliott announced that they were acquiring Citrix for such a hefty amount, and combining the two companies, it seemed likely that cost-cutting would follow. At the time, Constellation Research analyst Holger Mueller expected as much when he told TechCrunch:
“The combo has a lot of assets to play with on the tech side, especially with Citrix’s virtualization and the future of work. But it will be all about execution, and we will see in a few months if Vista and Elliott are undertaking a go-forward and growth strategy, or if they will save costs and ‘milk’ the install base. The high price tag will make the latter strategy hard to lay off, but perhaps with some asset sales, it could work well,” Mueller said.
It’s worth noting that Krause said that in addition to eliminating duplicate positions across the two companies, it would be looking at top customers and aligning the product roadmap to meet those customers, so it seems it's looking at the installed base that Mueller alluded to.
But each of those jobs, redundant or not from a business perspective, was held by an individual who is out of work today, and they join the thousands of other tech workers who have been laid off in recent months. If there is any silver lining to be found here, multiple reports have stated over the last several months that laid off tech workers are quickly finding work.