News: Spin off will enable creation of pure-play SaaS firm, according to CEO Bob Calderoni.
US based cloud computing company Citrix is restructuring its business by spinning off it’s GoTo business and cutting around 1,000 jobs.
The company was under pressure from activist hedge fund Elliott Management to slim down by selling assets and cutting costs.
Spinning off some of its business was one of the options suggested to Citrix, and the company decided to spin off its GoTo business, which includes the GoTo Meeting software, video-conferencing and desktop sharing.
Citrix said that it conducted a thorough review of strategic alternatives for the GoTo family of products before reaching the decision.
According to Citrix, the spinoff will help the company to enhance its strategic focus and respective competitive positions, as well as improve operational efficiency.
Citrix also expects to save around $200m in annualised pre-tax cost savings, 75% of which is likely to be in 2016.
Citrix CEO Bob Calderoni said: "Upon review, it is clear to us that the GoTo family of products is best suited to grow and operate as a standalone business.
"This separation will create a leading, pure-play SaaS company that will have a targeted focus with the flexibility to invest in its portfolio of products.
"It will also allow Citrix to refocus and amplify investment in our core mission to enable secure and reliable delivery of apps and data for the modern enterprise."
The company did not give details of the job cuts, but it is expected to occur outside of the GoTo operation.