Novell to lay off 10% in restructuring

Novell will eliminate about 600 jobs, or more than 10% of its workforce, as part of a restructuring in which the company will refocus on Linux and open source opportunities and the identity and resource management markets.

The Waltham, Mass., software vendor plans to complete the restructuring in the first quarter of its 2006 fiscal year, which will end Jan. 31, according to a company statement.

The restructuring will result in an estimated charge of $30 million to $35 million in the company's fiscal 2005 fourth quarter, which ended Oct. 31, but it will cut expenses by more than $110 million per year, Novell said.

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Novell will eliminate about 600 jobs, or more than 10% of its workforce, as part of a restructuring in which the company will refocus on Linux and open source opportunities and the identity and resource management markets.

The Waltham, Mass., software vendor plans to complete the restructuring in the first quarter of its 2006 fiscal year, which will end Jan. 31, according to a company statement.

The restructuring will result in an estimated charge of $30 million to $35 million in the company's fiscal 2005 fourth quarter, which ended Oct. 31, but it will cut expenses by more than $110 million per year, Novell said.

Novell also moved toward a possible spinoff of its consulting subsidiary, Celerant. Its board authorized Novell management and the company's financial adviser, Citigroup Corporate and Investment Banking, to explore strategic alternatives for Celerant.

Celerant's business is "non-core" to Novell, said Ron Hovsepian, Novell's new president and COO, in an interview before the company's announcements. He emphasized that the company isn't planning to sell its GroupWise collaboration software or its ZenWorks resource management software.

In its most recent financial report, released Aug. 25, Novell reported poor third-quarter results, with net income plummeting 91% to $2.1 million and revenue falling 4.7% to $290.2 million compared to the third quarter the year before. As of last Thursday, Novell had not said when it would report its year-end figures.

China Martens of the IDG News Service contributed to this report.

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