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Marengi ousted from Novell

Novell president Joe Marengi will be among the 1,000 workers losing their jobs at the struggling networking software company, according to sources.

    Novell (NOVL) president Joe Marengi will be among the 1,000 workers losing their jobs at the struggling networking software company, according to sources.

    Marengi, who guided the company on an interim basis while a successor to former CEO Robert Frankenberg was found, will be the highest-ranking employee axed in a bid by new chairman and CEO Eric Schmidt to rein in costs and focus product development at the Provo, Utah-based firm.

    A corporate spokesman would not comment on or confirm Marengi's ouster.

    Marengi was seen by many as an important link to day-to-day operations at Novell, capable of overseeing the minute details of running a billion-dollar company while Schmidt grew comfortable in his management role. Analysts have noted Schmidt's lack of administrative experience as a potential flaw in his CEO profile.

    "Schmidt did show [Marengi] some support early on," observed Jamie Lewis, president of the Burton Group.

    In several interviews upon Schmidt's arrival from Sun Microsystems, Marengi was quick to note that he was leading the charge to bring the Sun executive to the company after it was clear that he was not thought of as a long-term solution.

    Lewis said it will be interesting to see what happens next, since Sun has a business model that is "diametrically opposed" to Novell's channel-based approach and the new CEO is not familiar yet with the inner-workings of Novell. "Marengi seemed to have a good handle on that," he added.

    Schmidt, who arrived at the company in April with great expectations after a long stay as technology guru at Sun, has quickly seen momentum from his introduction as Novell's savior thwarted by another wave of bad financial results. The company posted a net loss of nearly $15 million for the just-completed quarter, an even greater loss than it had warned of earlier in the period.

    As a result of the poor numbers, Schmidt acknowledged that executive performance has "not been good" during a financial conference call last month, noting that 30 percent of the Novell executive team had left, been fired, or been demoted.

    Novell is seeing increased competition from Microsoft Windows NT Server in the corporate networking marketplace and in the small business sector that used to be the company's bread and butter.