Tom Krause, then president of Broadcom Software Group, rings the NASDAQ opening bell, November 8, 2021.
When the private equity owners of the enterprise software firm Citrix were recruiting a new chief executive officer in early 2022, they weren’t looking for a morale-boosting TED Talker or a visionary guru. Vista Equity Partners and Evergreen Coast Capital had just put together a deal to finance their $16.5 billion acquisition almost entirely in high-yield floating rate bonds. Interest rates were fast floating higher, and Citrix didn’t have enough cash on hand to make a single interest payment.
They needed a CEO who could squeeze Citrix’s customers for all they had while cutting overhead to the bone, fast.
They found a perfect candidate in Tom Krause, president of the software division of chip giant Broadcom. Krause had just brokered an even bigger deal than Citrix, offering $61 billion to buy the $8 billion-a-year software company VMware. That took nearly two years to get approved, because Krause’s acquisition track record was so well established and reviled within the industry: converting its software products to subscription “services,” jacking up prices as much as tenfold on small-business customers in the process.
The private equity guys knew they could count on Krause to do the same thing with Citrix. But they also needed him to do it more aggressively than he ever had before, because the numbers behind the Citrix deal were so patently absurd: The company had just over $3 billion in revenue, coupled with nearly $15 billion in debt.
But Krause, a doughy 40-something who gained global renown this week after The Washington Post identified him as the apparent Fagin figure leading Elon Musk’s merry band of pubescent sovereignty pickpockets illegally accessing Treasury Department payment systems, got the job done. Citrix, which would later be renamed Cloud Software Group, announced about 1,000 layoffs right off the bat in fall 2022, followed by another, deeper round of several thousand more comprising 15 percent of its staff in January 2023, despite having 125 open positions listed on its website. “To get to where I know this company can go requires us to completely rethink how we operate and organize at every level of the business and rebuild our go-forward plans looking to the future instead of the past,” Krause wrote in an internal staff email. “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.”
And he wasn’t done: At some point after that, he mandated that all employees return to the office—which many viewed as strange, since Citrix’s flagship products facilitate virtual workplaces, and the company has invested heavily in polling and research that depicts remote workers as more productive and engaged than their office-chained counterparts. “That mandate was pretty short-lived, though, once Krause figured he could cut even more costs by shutting down the offices,” chuckles a longtime Citrix employee who held on through multiple rounds of layoffs before getting axed earlier this year.
Notably, both Krause and Musk faced similar assignments at the jobs they took in early 2022.
Krause found other ways to cut costs, according to former employees and lawsuits filed by vendors and business partners. He eliminated a long list of employee perks, from Citrix-branded merch awarded for work anniversaries, new hires, and Pride Month, to “Thank You” days for managers who worked overtime, to quarterly bonuses for employees who had special skills or certifications.
When Citrix abruptly terminated the merch program in September 2022, it left the supplier with loads of Citrix-branded inventory, which was delivered to Citrix headquarters and invoiced for $437,574.97. Krause’s team refused to pay the bill, according to a lawsuit the vendor filed in October 2023 that was ultimately settled out of court. Another vendor, Singapore-based FinLync, had a similar experience: After receiving prompt payments for providing financial technology services to Citrix for the first two years of a three-year contract, Citrix unilaterally refused to pay a third invoice sent in the fall of 2022. FinLync also ultimately settled the dispute out of court.
David Morgan, a disabled Air Force veteran Citrix hired to service public-sector contracts the same month Krause came on, figured he was safe. Krause’s playbook for acquiring software companies centered around focusing the business on maintaining larger, so-called “above the line” customers, like large corporations and government agencies, and encouraging smaller consultancies to do the heavy lifting for smaller clients. Morgan, who had run information technology services at various Air Force bases, was also heartened when his supervisors enrolled him in a program in which he would start to accrue stock options after a year of service. He also says he maintained a customer service rating above 90 percent throughout his tenure at Citrix—no small feat at a company that was constantly laying off workers.
But servicing customers kept getting harder and harder, according to Morgan and a former Citrix engineer who was let go last month. After customer service was gutted, a host of large-account and engineering managers were next. Problems started taking longer to fix even for “whale” customers. “I don’t think anybody was picketing,” the recently axed former engineer said, “but there were lots of gripes and concerns.”
Morgan was axed along with another 12 percent of the company’s remaining employees in early 2024, a few weeks before his first tranche of stock options were slated to vest. “It was so cold, it was literally like, OK, you’re being laid off, your access to the systems is going to be cut off in an hour.” His clients, namely state and municipal government agencies like the California state fire department and various Canadian public-sector entities, were calling and emailing him for weeks afterward. They told him Citrix had started routing their inquiries to Indian call centers when they had issues. “If you paid a certain amount of money you were supposed to get preferential treatment, [but] a lot of these customers pay for services that Citrix ain’t even honoring,” Morgan said.
Then last month, Citrix again slashed several hundred employees, including “the last remaining support engineers,” according to the recently laid-off engineers. Now Morgan’s military contacts are telling him they too are getting routed to offshore call centers 10,000 miles away, which he claims is a blatant breach of contract, because DOD policy explicitly requires vendors for national-security reasons to maintain U.S.-domiciled customer service operations. If DOGE is looking for waste and abuse in government spending, Krause should “look in the mirror [and] cut off Citrix,” he says.
More to the point, however, Morgan believes Krause destroyed a company he once loved. “He runs everything into the ground, look at his time at Broadcom. The dude is a heartless person who should not be in any line of business, but especially not in the government sector.”
The heartlessness, of course, is the point.
ANONYMOUS EMPLOYEES POSTING IN ONLINE FORUMS say they were as surprised as anyone to read that their boss would himself be telecommuting to his day job while doing some kind of stint up in Washington, D.C., for Elon Musk’s “Department of Government Efficiency.” On the company’s page at TheLayoff.com, multiple users referenced a memo praising Musk that Krause had sent to the software company’s staff around Inauguration Day.
“The criteria for DOGE is how many you have fired, how much you enjoy firing people, and how little you care about the impact on peoples well being,” another anonymous user posted at TheLayoff. “No wonder TK [Tom Krause] was tapped for this. He’s their dream employee!”
Notably, both Krause and Musk faced similar assignments at the jobs they took in early 2022, with Citrix perhaps the only software company taken private that year at a more absurd valuation than Twitter. While Musk certainly seemed to relish firing roughly two-thirds of Twitter’s 7,500 employees at the time, it’s important to remember that he only acquired the social media platform at borderline gunpoint following exhaustive litigation. But Krause voluntarily took his job.
To finance the Twitter takeover, Musk went on a lengthy road show, hitting up various billionaires to invest; Vista founder Robert Smith turned him down, probably because he was preoccupied trying to sell $15 billion in dogshit Citrix debt. But many of the same institutions were involved in both deals, such as Bank of America, the lead underwriter for Twitter and Citrix.
Musk loyalists began badgering Treasury officials about accessing payment systems shortly after the election, according to The Washington Post, but they were thwarted by career employees until Scott Bessent’s confirmation hearing, after which Bessent’s staff forced out the relevant gatekeeper and gave the DOGE team access to the systems. That team was led at Treasury by Krause, whose history at Citrix must sound creepily familiar to anyone working in the federal government right now.
Wired and the Federal Reserve scholar Nathan Tankus have reported that multiple young DOGE staffers, namely, former SpaceX engineer Marko Elez, but also more than a half dozen others who have been working “120-hour weeks” with the help of $5,000 designer sleep pods donated by the SoftBank-funded “sleep fitness” startup Eight Sleep, had gained direct access to payment systems responsible for trillions of dollars in annual Treasury transactions and were literally rewriting the source code.
The Treasury Department claimed that wasn’t the case; that the access was “read-only” and limited to Krause and Elez, both of whom have been made temporary Treasury employees. At an emergency hearing to rule on a temporary restraining order motion a group of unions and nonprofits filed last week to halt DOGE’s access to the systems that process 88 percent of the payments in the federal government, summing to over $5 trillion, on grounds of violating the Privacy Act of 1974 and other protections of sensitive personal information, Justice Department attorney Brad Humphreys seemed to reiterate this contention, stating repeatedly that only Krause and Elez had been authorized to access the systems, between muting his line to confer with colleagues, before finally conceding: “I don’t know if I can say nothing has been done” with records in the system.
But the whole “read-only” thing turned out to be a lie, according to internal emails obtained by CNN. A week before Bessent’s confirmation, his chief of staff Daniel Katz began explicitly badgering then-acting Treasury Secretary David Lebryk to show Krause how to immediately pause all payment files “still in the queue” so he could examine individual payments. Lebryk objected, arguing in an email to Krause that he should consider “personal liability issues” before taking such a drastic measure.
Krause replied that he would “feel more comfortable” halting all the payments so he could “at least … review the underlying payment requests,” and added, true to his reputation:
“I would also recommend you consider an equal alternative liability.”
Lebryk was gone by the end of the week.
On Bluesky, the writer Anna Merlan voiced a sentiment no doubt shared by thousands of axed Citrix employees:
“Now the whole country gets the experience of what it’s like when private equity buys the place you work.”
