Novell planning more layoffs. Why this is positive news

Novell is planning more layoffs. It's about time.

I was surprised to learn today that Novell only employs 4100 people (down from 7000+ when I was there). The company is planning even more layoffs, a high percentage of which will almost certainly fall on the heads of Novell's Utah-based employees as the company offshores development on things like Groupwise to India and as it consolidates operations in Waltham, Massachusetts, a process that has been underway for several years.

I'm surprised because this has clearly been what the company needed to do for many years. The company is getting leaner, exactly what it needs to be to compete in open source. A year ago I opined:

As for Novell and the apparent belief that it just can't cut heads without cutting revenue, let me give Novell some guidance on this as a former employee: yes, you can. You have all sorts of "fat" that can be trimmed from the company....

For Novell to be the aggressive, efficient machine that it must be to compete in open source, it must do more with less. Moving jobs to lower-cost geographies is a start, but it doesn't tackle the real problem: too many people doing too little. You have some exceptional people within Novell - put more on their shoulders and rid yourself of those that come into work each day like they're collecting pensions, not paychecks.

There's nothing pleasant about layoffs, but they are an essential part of what Novell needs to reinvigorate itself. Novell has the essentials of a strong business. It just has too many people, even today, getting in each other's way. The company is right to do this, even if it's painful for individual employees.

I personally wish the company saw more value in its Provo employees (200 of the last 250 to go were Utah-based employees, and the company has consistently cut its Provo employee base over the past several years), but Utah companies will benefit from having these generally talented people available for hire.

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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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