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Novell Targeting 10-Plus Percent of EMEA Employees for Layoffs

Jun 13, 2005, 20:00 (0 Talkback[s])
(Other stories by Brian Proffitt)

By Brian Proffitt
Managing Editor

While Novell has not commented on the possibility of upcoming layoffs, sources have revealed layoff targets for Novell employees in the company's Europe, Middle East, and Africa (EMEA) division.

Sources close to Novell and SUSE Linux have indicated that 180 employees will be let go in the EMEA division. Departments targeted include mostly sales and partner divisions.

While it is not know exactly how many of these 180 employees will come out of Novell's SUSE Linux division, one source expressed that "less than half" of this total will come out of SUSE Linux.

The projected number of layoffs is small compared to Novell's worldwide employee count, which according to Novell Press Relations Manager Kevan Barney is approximately 5,900. The number of Novell EMEA employees numbers around 1,300, which puts the projected division-wide layoff percentage at 13.9 percent.

This is, based on other information related to Linux Today, not a universal percentage. One Novell manager in Europe was apparently asked to reduce staff by 25 percent. Managers are also working to reduce employee numbers through some hiring freezes and attrition.

These layoffs, if they do occur, make sense when seen against Novell's 2Q loss of US$16 million, which the Waltham, Massachusetts-based company announced May 26. Novell's report identified declining sales of their older Netware software business coupled with just a six percent rise in sales on the Linux side of the business as a significant contributor to their loss.

European sales figures were specifically targeted as a problem area for Novell. But, given the company's positive public stance on Linux as its future salvation, it is not surprising that the SUSE division was spared some of the cuts.

In his conference call announcing the 2Q results last month, Novell CEO Jack Messman was still very positive on Linux, citing recent sales to the US Department of Health and Human Services and several Fortune 500 companies, including Circuit City and Toronto-Dominion Bank in Canada.

Novell has made it well known that their future depends on the success of their Linux sales, and that this time of transition from one business to another is going to be the roughest part of their road ahead.

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