Novell cuts 3 percent of its workforce, plus benefits

Linux jobs in the United States are booming, up 6 percent since January, according to data from Dice.com. This will come as small consolation to Novell employees, however, which weathered another round of layoffs at the Waltham, Mass.-based company.

According to several sources within the company, and confirmed by Novell's public-relations director, Ian Bruce, Novell last week laid off 100 to 130 people of its roughly 3,900 global employees.

While my sources indicated that the Workgroup division was particularly hard-hit, Bruce told me that the cuts came "across the company, both geographically and productwise."

Novell appears to be doing its best in caring for these employees, offering several months of severance pay, apparently based on the number of years with the company, among other factors.

For those remaining employed there, Novell announced this week that it would be suspending 401(k) matching contributions, which followed on the heels of its formal filing on Monday, to that effect, with the U.S. Securities and Exchange Commission.

Novell has spent the past few years attempting to reinvent itself as a Linux company, and it has managed to string together several quarters with strong earnings in its Linux business on the back of its controversial partnership with Microsoft. The company has struggled to compete effectively with Linux-leader Red Hat.

On November 2, a Novell PR representative contacted me to arrange a conversation with CEO Ron Hovsepian about Novell's "new focus in its strategic direction."

Whether this means more or less open source is not yet clear. It is clear, however, that Novell needs to focus more on top-line revenue growth, and not merely ways to cut costs. Until Novell learns to grow business, and not simply reduce expenses, its employees are going to remain all-too-familiar with layoffs.

[jd_in_sb]

Novell is still around?

[Arthur Belle Dent]

&gt;Novell is still around?<br /><br />I think they used to be in the Linux business once upon a time.<br />Now, Im not sure.<br /><br />And they have been laying off employees for quite some time, this is NOT a new development.<br />They laid off about 600-800 employees 3-4 years ago, another 100 or so in February of this year and a SEC filing. <br />showed that much of their restructuring plan had incured $80 million in expenses was for laid-off employees severances.<br />Most news usually are prefixed by "Novell is going through another round of layoffs this month" so its pretty hard to keep track but you can always bet that the PR/Liar in chief usually will follow it with a "Novell has no plans for future layoffs" which is always true until the next round of layoffs.<br /><br />Still need them to fight the ghost of SCO but beyond that... nada.

[pentest]

I have mixed feelings about Novell.<br /><br />On the one hand, they have made many stupid business decisions over the years, the pact with MS being in the top 10 in corporate history.<br /><br />On the other hand, they have what is hands down the best Linux distro ever.

[OlsonBW]

Novell had great products in Netware and GroupWise. They were clueless about marketing.<br /><br />As for their Linux business. Because of their partnership with Microsoft I wouldn't touch them with a 10 foot pole. I'm guessing that anyone else that doesn't want to have anything to do with Microsoft feels the same way. If not, why would they not just stick with Windows? Yes I know a few reasons by that would be the only people I know that would go with Novell. Everyone else that wants to use Linux and not Microsoft is steering clear of Novell.

[auser1234]

Well said, Matt - agree with the last paragraph particularly. Thing Novell needs to learn is that it is possible to cut costs too far and that ultimately cutting things like employee benefits and opportunities to participate in industry conferences and training events hurts the company more than helps it. <br /><br />Another thing that's absolutely needed is to not do budgeting using run rates - that penalizes those who manage their budgets appropriately and rewards those who mismanage their budgets. Give more money to the departments that demonstrate that they can manage a budget and get rid of the managers who cannot do so effectively.

[dirTdogE]

I'm pretty sure that 3,900 figure is outdated. I remember that figure from a year or more ago ... it has been coming down pretty regularly and I believe the most current figure is 3,700 -- http://www.google.com/finance?q=NASDAQ%3ANOVL

[chullys]

I would be vary of using those figures from the SearchEnterpriseLinux site to corroborate the rise of Linux jobs in the US. The figures come from here - http://www.diceholdingsinc.com/phoenix.zhtml?c=211152&#38;p=irol-dicereport - and there is no way one can logically deduce that jobs have gone up or down as there is no indication to that effect in the figures.

[clinux4]

Novell has made many great product over the years, that have made my job easier. They are reliable and work with other operating systems. Their work with MS has been done to help them create systems that work with what most computer users still use in business. They are working to move people to new secure desktops, but selling that to people, that only know Windows or Mac is still a pioneer job. The work on the frontier was difficult. I like their products and find them to be worth looking at because they work 24/7 once installed. <br /><br />The people that work at Novell are very good at their jobs and it is unfortunate that management has to let more go. Hopefully, they will be able to recover soon from the oppressive economy feeling that is everywhere and probably the real cause of this.