Citrix to reduce staff by 10 percent

Citrix Systems, the business software company behind the Xen hypervisor, said it plans to cut 10 percent of jobs despite being "pleased" with its fourth-quarter results.

Overall revenue for the fourth quarter increased from $400 million (300 million pounds) to $416 million, the company said on Wednesday, even though revenue from product licenses fell by 9 percent. Revenue from license updates was up by 13 percent, and online service revenue grew by 18 percent compared with the same quarter the previous year. Net income for the fourth quarter was $60 million, calculated on a GAAP basis, a drop from $63 million.

The application-delivery infrastructure specialist also reported financial results for the full 2008 year. Annual revenue went from $1.39 billion in 2007 to $1.58 billion, a rise of 14 percent. Net income was $178 million, compared with $214m for 2007.

"I'm pleased with our fourth-quarter results and performance for 2008, especially in the face of an extraordinary worldwide environment," said Mark Templeton, chief executive of Citrix, in a statement.

At the same time, Citrix announced that it was starting a "restructuring program and steps to reduce (the company's) headcount by approximately 10 percent." That is equivalent to approximately 490 staff.

Citrix saw a slight decline in part of its Xen virtualization business. Of the three Xen divisions--Xen App, Xen Server, and Xen desktop--one, XenApp, saw a fall in sales of three percent in the fourth quarter, compared with the same time last year.

"Overall, the Xen business looks very healthy," James Stephenson, Citrix's area vice president for the UK, Ireland, and South Africa told ZDNet.co.uk. "What we saw was the same as everybody else, which is the business doing well until the third quarter this year."

Stephenson said that the other two Xen divisions--Xen Server and Xen Desktop--grew by 40 percent over the same quarter last year.

Colin Barker of ZDNet UK reported from London.