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Novell confirms layoffs

The cuts took place Friday and amount to less than 3% of the company's workforce

By Eric Lai
January 31, 2009 12:00 PM ET

Computerworld - Open-source vendor Novell Inc. on Saturday confirmed reports that it had a layoff on Friday, though it said the layoffs were small and amounted to less than 3% of its workforce.

Novell spokesman Ian Bruce said the company laid off less than 100 out of 4,200 employees worldwide. He declined to say if the move came in response to slumping sales at the Waltham, Mass.-based firm.

The number of layoffs cited by Bruce is far smaller than the numbers bouncing around the Web Friday night. For instance, CNET blogger Matt Asay reported that Novell had cut up to 1,000 employees, citing an inside source who claimed that "basically an across-the-board reduction of 25%" had been made.

The layoff was also mentioned by a pair of Twitter messages, including one from an apparent Novell employee.

For its most recent fiscal year 2008 ended Oct. 31, Novell lost $18 million on revenue of $957 million.

During a Dec. 4 conference call with Wall Street analysts, CEO Ron Hovsepian said that the company was committed to achieving profitability and that job cuts might be necessary if sales slumped. "I think we are just evaluating at this point any additional restructures or activities that may take place in 2009, and those would be largely dependent on the overall economic condition and its impact to our revenues, if any," he said at the time.

Novell has had repeated layoffs and restructuring over the past decade. It laid off 10% of its workforce, or 600 employees, in November 2005, and 900 employees, or 16% of its workforce, back in September 2000.

Novell had also just finished a two-year restructuring plan at the end of October in which it incurred $76 million in expenses, much of it for laid-off employee severance, according to an SEC filing.

Though headquartered in the Boston suburbs after its merger with Cambridge Technology Partners Inc. in 2001, most of Novell's employees work in Provo, Utah, where it owns 887,000 square feet of office space.

In December, Novell canceled its long-running BrainShare conference in Salt Lake City for the first time in 20 years, citing slashed travel budgets among its IT customers.

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