On heels of VMware, Citrix announces hiring slowdowns
Tech sector, generally bullish so far, gets increasingly cautious
Computerworld - Citrix Systems Inc. said on Wednesday that it is slowing its hiring pace in response to economic conditions. It is the second IT vendor this week to cut the tempo of hiring, following VMware Inc., which said it was taking a "pause" on gaining new employees.
Both firms, in separate calls with financial analysts, cited a growing sense of spending caution among IT customers. Indeed, when Mark Templeton, president and CEO of Citrix, was asked on a call Wednesday with financial analysts to provide an anecdote to illustrate the trend, he was able to describe a firsthand experience with the changing mood.
Templeton said he spent June in Europe on business. Over the course of just those four weeks, he said he saw increasing amounts of caution in response to news headlines and fuel price increases. "It was remarkably different when I left Europe than when I arrived," he said.
Citrix reported $392 million in revenue for the second quarter, which ended June 30, up 17% from the year ago quarter. David Henshall, Citrix CFO, called those good results for the firm.
But Citrix hired less than 100 employees in the last quarter, which is less than half of the employees hired in prior periods, said Henshall. "Looking forward, I expect a further decline in the hiring rate for the remainder of 2008 and into next year," he said.
Paul Maritz, the newly appointed president and CEO of VMware, said Tuesday that although the company had hired 2,000 people in the past year, it is now putting in place a "hiring pause," limiting new hires to the most strategic. VMware currently employs 6,000 people.
Maritz did not say that the hold on hiring was related to the economy. Instead, he said it was needed "to make sure we have properly digested our growth."
But Maritz's angle hiring was blunted by statements from VMware CFO Mark Peek, who during this week's earnings call said there had been a "clear change" in customer behavior last quarter in response to changing economic conditions.
The moves by these two firms add weight to a report released by Goldman Sachs & Co. last week that predicted a decline in IT jobs in 2009, based on a survey of CIOs. The investment banks sees IT managers shelving discretionary projects.
But the Goldman Sachs survey also indicated that virtualization and server consolidation would be the top two priorities of IT managers -- a move that should help both VMware and Citrix's developing XenServer virtualization effort. Its server was released this year.
Citrix, however, cut its revenue forecast on the virtualization products (both server and desktop) that came out of its XenSource acquisition, from $50 million to $25 million for this fiscal year. Templeton said that the company had many firms in the process of piloting its products.
- Silicon Valley's 19 Coolest Places to Work
- Is Windows 8 Development Worth the Trouble?
- 8 Books Every IT Leader Should Read This Year
- 10 Hot Hadoop Startups to Watch
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- ERP in the Cloud and the Modern Business View IDC's White Paper, to review IDC CloudTrack Survey findings, gain expert insight into the challenges and opportunities the cloud presents, and determine...
- Oracle ERP Cloud Service - Back-Office Solutions that Keep You in Front Learn how you can harness the power of the cloud to run your business more effectively and lower upfront costs.
- Integration with Oracle Fusion Financials Cloud Service While moving your financial system to the cloud may seem straightforward, truly realizing the advantages of the cloud requires a complete understanding how...
- Hadoop for Dummies Today, organizations in every industry are being showered with imposing quantities of new information. Along with traditional sources, many more data channels and...
- Live Webcast Best Practices: How to Improve Business Continuity with Virtualization VMware solutions include a range of business continuity capabilities to help ensure availability for applications across your virtualized environment. Learn More>>
- Cloud Knowledge Vault Learn how your organization can benefit from the scalability, flexibility, and performance that the cloud offers through the short videos and other resources...
- Endpoint Data Management: Protecting the Perimeter of the Internet of Things Not surprisingly, "Internet of Things" (IoT) and Big Data present new challenges AND opportunities for enterprise IT. Teams need to harness, secure and... All Data Center White Papers | Webcasts