The Cloud Software Group, born of last year's merger between Citrix Systems and Tibco Software, laid off thousands of workers on January 10 following a revamp of business operations affecting sales, marketing and product development.
In an email to employees ahead of the layoffs, CSG CEO Tom Krause outlined plans to focus direct sales and marketing only on its 1,600 largest customers and limit product development to a newly drawn roadmap.
"What we are building for CSG requires us to completely rethink how Citrix and Tibco ran as a businesses, which is an extraordinary undertaking," Krause said in the email shared with TechTarget by a laid-off employee.
On Tuesday, CSG sent emails notifying employees it laid off across the company. Some people left that day; others would stay temporarily for a transition period. There were no details on a severance package.
The company eliminated about 15% of CSG's workforce of roughly 15,000, Krause said in a statement released Wednesday. That amounts to about 2,250 jobs.
"While there are significant impacts to the organization, many that have been painful for the teams this week, I am confident in our new business model," Krause said.
CSG declined to be interviewed.
A laid-off engineer who requested anonymity expected cuts to the cybersecurity unit to have the most severe impact on products.
"There are a lot of people who had been working for like eight years, nine years, who knew the product deeply -- all the features," he said. "They were crucial in terms of designing the security architecture. All of them were let go, so I wouldn't be too comfortable about the outlook of security."
There are very few that actually want to stay after all the changes have happened. Especially because the new compensation structure looks pretty awful.
Laid-off worker who asked to remain anonymous
CSG's owners, investment firms Vista Equity Partners and Evergreen Coast Capital, launched the company Dec. 1 after completing the purchase of Citrix Systems in September and merging it with Tibco Software. CSG then started a comprehensive evaluation of the combined company, examining every role, system, and business process, Krause said in the email to employees.
The most notable change was how CSG would sell its products, Krause said. CSG planned to sell to its top 1,600 customers across North America and Europe. The customer segment includes the top 1,000 users of Citrix products, including NetScaler and XenServer, and the top 600 TIBCO customers.
CSG planned to let its channel partners serve the rest of its customers. In return, CSG would provide "richer incentives" and simplify its partner program.
Internally, CSG executives have discussed raising prices by 30% to 40% by reducing discounts offered to customers, said a laid-off sales rep who asked to remain anonymous.
It was unclear how CSG's direct sales team would go after new business, the sale rep said. In September, Tibco laid off the roughly 80 people responsible for finding new customers.
Later, the company gave salespeople it planned to lay off only a few responsibilities, the sales rep said.
"They took all my accounts away from me," he said. "They took all my opportunities away from me, and I twiddled my thumbs."
Overall, employees interviewed said working at CSG has been stressful over the last month since most knew that layoffs were coming.
"There are very few that actually want to stay after all the changes have happened," the sales rep said. "Especially because the new compensation structure looks pretty awful."
Tom Krause
The restructuring of Citrix and Tibco as a combined company includes a "clear and focused" 2023 product roadmap with milestones to eliminate "any guesswork for where we will invest our engineering resources," Krause said.
"This means that while we will heavily invest to growth areas that drive the roadmap, we will also eliminate those areas that do not," he said.
CSG's Citrix ShareFile and Tibco Jaspersoft businesses, which serve different markets and customer segments than the rest of CSG, would operate almost independently through their separate salesforces, Krause said. ShareFile is a content collaboration and file-sharing platform, and Tibco Jaspersoft is a reporting and analytics platform.
Antone Gonsalves is the networking news director for TechTarget Editorial. He has deep and wide experience in tech journalism. Since the mid-1990s, he has worked for UBM's InformationWeek, TechWeb and Computer Reseller News. He has also written for Ziff Davis' PC Week, IDG's CSOonline and IBTMedia's CruxialCIO, and rounded all of that out by covering startups for Bloomberg News. He started his journalism career at United Press International, working as a reporter and editor in California, Texas, Kansas and Florida. Have a news tip? Please drop him an email.
Tom Krause
