Novell to Cut 600 Jobs, Including 200 at Provo

Novell to Cut 600 Jobs, Including 200 at Provo

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WALTHAM, Mass. (AP) -- Business software maker Novell Inc. will cut about 600 positions, including 200 at Provo, Utah, by January as part of its restructuring efforts to concentrate on core strategic areas such as the Linux and open-source markets.

The companywide cut represents near 10 percent of the firm's work force of 5,800 and the Provo cuts are 10 percent of its 2,000 workers there.

The company declined to say what types of jobs were being eliminated.

The job cuts are the largest for the company since November 2001, when Novell eliminated 1,400 positions, or about 19 percent of its overall work force. Just 84 jobs were lost in Provo in that cut.

Employees in Provo were notified Wednesday in one-on-one meetings, and their layoffs were effective immediately.

"We're undergoing some restructuring," said Kevan Barney, a Novell spokesman in Utah. "What we're talking about is a reduction in head count. The rationale is a concentration of our resources on what we have identified as our key growth opportunities in Linux and open-source and identity and resource management."

Novell, which moved its corporate headquarters from Provo to Waltham in 2004, says the layoffs are expected to cut its annual expenses by more than $110 million.

As the company puts more focus on its core businesses, Novell's board authorized management and its financial adviser to explore strategic options for Celerant, Novell's consulting unit. The company has previously said that it intends to separate Celerant from Novell when market and other conditions are appropriate.

In a press release Wednesday, Novell said it expects to book a restructuring charge of $30 million to $35 million in its fiscal fourth quarter ended Oct. 31.

Novell said the full effect of the cost reductions is expected to be realized in the first quarter ending Jan. 31.

The company plans to concentrate its business in the Linux, open source and identity and resource-management markets.

"While the cost reductions will result in some lost revenue opportunities, the net result is expected to be improved profitability as we enter fiscal year 2006," Chief Financial Officer Joseph S. Tibbetts Jr. said in the release.

In the most recent third quarter, Novell's earnings fell to $2.1 million from $23.4 million as revenue fell almost 5 percent and operating expenses increased.

Novell shares were unchanged Wednesday at $7.47 on the Nasdaq Stock Market.

(Copyright 2005 by The Associated Press. All Rights Reserved.)

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