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Jan 29, 2009

Citrix, Jabil Cut 3,500 Jobs Combined as Technology Sales Wane

Citrix Systems Inc. and Jabil Circuit Inc. plan to reduce their workforces by a combined 3,500 to cut costs as the recession hurts demand for technology products.

Software maker Citrix, based in Fort Lauderdale, Florida, said it will cut 500 jobs, or 10 percent of the total. St. Petersburg, Florida-based Jabil, a manufacturer of electronics, will eliminate 3,000 positions.

Technology businesses including Microsoft Corp. and Texas Instruments Inc. are slashing jobs as they adapt to slowing demand for software and computers. Through yesterday, U.S. companies had announced more than 519,895 job cuts since Nov. 1, according to Bloomberg data.

Citrix, which makes networking programs, forecast a 5 percent drop in revenue in the first quarter from a year earlier. Operating margin will be little changed in the period, the company said. For all of 2009, sales will be little changed, with the operating margin increasing as much as 1 percent.

The job cuts will save about $50 million in employee expenses yearly before taxes, Citrix said. Most of the pretax expenses of as much as $23 million will come in the first quarter, the company said.

Jabil, which makes mobile phones for Nokia Oyj, said its cuts will save about $55 million annually. The company, which has 85,000 employees, said it will have $65 million in restructuring costs over the next two years.

Citrix dropped $1.69, or 7 percent, to $22.50 in extended trading after closing at $24.19 on the Nasdaq Stock Market. The shares tumbled 38 percent last year. Jabil was unchanged in late trading and rose 4 percent to $6.36 today on the New York Stock Exchange.

Source : Bloomberg
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