SuSE, one of the major sellers of Linux software and services,
has laid off 30 of the 45 people in its Oakland, Calif., office and will
shift much of the responsibility for North American operations to its
headquarters in Germany.
The layoffs, which took place Wednesday, reduced the number of support staff
but didn't target programmers, spokeswoman Xenia von Wedel said. "We can be
more efficient and reduce costs if we do it from Germany," she said.
Customers seeking technical support will be routed to SuSE employees in
Germany, she said. "It doesn't change anything for the U.S. market," von
Wedel said. "(SuSE still has) its 24-hour support services and partnerships
with Compaq and IBM."
But Giga Information Group analyst
Stacey Quandt saw larger implications besides cost-saving measures. She said
the move also is an effort by the company's Nuremberg, Germany, headquarters
to centralize control. And though SuSE has strong technical expertise and
business overall, business partners will weigh the layoffs in their analysis
of SuSE's efforts to expand globally, she said.
"The (layoff) may cause some of SuSE's partners to question the viability
of SuSE's effort in North America," Quandt said.
SuSE, with about 470 employees now, is one of the four Linux companies to
have worldwide Linux support agreements with IBM and other computer sellers.
The others are Red Hat, Caldera Systems and Turbolinux, with Paris-based
MandrakeSoft trying to make the leap to the level of the other four. SuSE's
stronghold is in German-speaking countries, while Red Hat is dominant in the
United States.
It's been an era of belt-tightening as the evaporation of Linux hype forces
Linux companies to adopt more down-to-earth plans for capitalizing from the
software's popularity. Turbolinux and Linuxcare are considering merging, while Red Hat laid off 20 workers in December as
it cut back on plans for its Web site. VA Linux Systems, which sells
hardware, has twice warned
that revenues were growing more slowly than expected.
SuSE, which has gone through four presidents of North American operations in
recent years, seems to suffer from tensions between U.S. operations and
German headquarters, Quandt said.
At the LinuxWorld Conference and
Expo last week, SuSE announced an expanded partnership with IBM, the
largest traditional computing company with a major effort to benefit from
Linux. Under the new agreement, IBM's global services division will be able
to call upon SuSE expertise to fix problems that require changes to the
underlying programming source code of Linux.
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era of belt-tightening as the evaporation of Linux hype forces
Linux companies to adopt more down-to-earth plans for capitalizing from the
software's popularity. Turbolinux and Linuxcare are considering merging, while Red Hat laid off 20 workers in December as
it cut back on plans for its Web site. VA Linux Systems, which sells
hardware, has twice warned
that revenues were growing more slowly than expected. 
Join the conversation