Layoffs likely as Novell readies for revamp

The new man in the number-two spot at Novell Inc. has a major task on his hands: how to get the troubled company’s business back into alignment. Part of the company’s restructuring will be reflected in Novell’s upcoming layoffs, due to be announced at the same time as the software vendor’s fourth-quarter financial results, he said.

“The layoffs will be more about resource allocation,” Ron Hovsepian, Novell’s new president and chief operating officer (COO), said in an interview Wednesday at the Open Source Business Conference (OSBC) East taking place in Newton, Massachusetts. He declined to put a figure on the pending layoffs, but suggested that rumors that over 20 percent of Novell’s 5,800 workforce may be out of a job might be an overexaggeration.

Novell’s has just closed its financial year and the company has yet to announce when it will release its fourth-quarter results. When the financials appear, Novell will detail the layoffs and its other restructuring plans, according to Hovsepian. The announcement of the financials release is imminent, he said.

In its most recent financial report, released Aug. 25, Novell reported poor third-quarter results, with net income plummeting 91 percent to US$2.1 million, while revenue fell 4.7 percent to $290.2 million.

Although he wouldn’t confirm whether Novell will sell off its Celerant consulting business as has been widely anticipated, Hovespian did describe it as “non-core,” adding, “It’s something we could have a nice discussion about. Stay tuned.” He continued the company line as previously laid out by Chairman and Chief Executive Officer Jack Messman that Novell is not planning to sell off either its GroupWise collaboration software or its ZenWorks resource management software.

“We will continue to focus on growth areas in our business — Linux, identity and our core platforms,” Hovespian said. The company is trying to allocate company resources in a way that matches the needs of the marketplace, he said. Areas of focus going forward will see the company continuing to grow its relationships with independent software vendors as well as putting more effort into its distribution partnerships, according to Hovespian.

Hovsepian was previously executive vice president and president of Novell’s global field operations. Novell announced his promotion to president and COO late Tuesday. The number-two slot at Novell has been open since last year when Chris Stone left the company.

Related links:

Novell CTO sets exit plan on eve of user conference

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