Novell cuts 3 percent of its workforce, plus benefits

Amid a "new focus in its strategic direction" as it struggles to deliver a compelling message to the market, the company conducts layoffs and cuts 401(k) matching.

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.

About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.

     

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