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VA Linux Announces Planned 25% Staff Cut
prac_regex was the first to write with news of planned cuts announced today for VA Linux. "The title doesn't say it all, but it says a lot.
Yahoo reports the cost cutting VA implemented today." VA reported higher-than expected per-share losses, and announced some big organizational changes as well. Guess "playing in the big leagues" means taking the occasional bean-ball. (Note: OSDN, of which Slashdot is a part, is itself part of VA, in case you hadn't heard;))
And they couldn't even sell that. The company I work for (in Menlo Park, CA) wanted to contract with VA for some performance tweaking of a few large MySQL database servers running Linux. While the cost was about average for consulting rates, there was a four week lag time until the consultant could visit.
We didn't have the time. We figured it out ourselves.
But who were they selling to? The geek market is more likely to be making their own computers and installing their own distros. The large corporate market is likely to have their own staff that can deal with installing and configuring Linux.
This is somewhat true. We use Linux, FreeBSD and OpenBSD in our production environment. However, we buy systems from ASL Labs. The VA boxes were just too damn expensive, and the ASL machines were of higher quality hardware.
My perception of VA is that they are too concerned with Community "Look Good", and not concerned enough with running a profitable business. On one hand, they've done a great service to the Linux community. On the other, they are starting to fall apart because of it.
Not once has a popular website been bought out by a big corporation without losing its soul, and not once has a corporation managed such a site successfully without losing its shirt.
Slashdot? We just haven't seen the end of the road, yet. But it's coming.
It's the classic problem of vertical consolidation in the industry: VaLinux makes the hardware that people run when reading VaLinux's web content (via Andover). They control each stage of the production, and they ought to be able to do so financially successfully, right?
Wrong.
The disparate parts of VaLinux's farflung online empire were never well-suited to furthering VaLinux's corporate goals. VaLinux was and probably always will be a company that builds expensive linux machines for elite linux users (unlike Dell and other companies targetting the low-end linux crowd). Slashdot, Freshmeat, and now Kuro5hin were never aimed at this same audience.
The average Slashdot reader can't be bothered to load OSDN's ads. What made VaLinux think they could convince those same users to buy VaLinux-branded hardware?
Either the Andover division is going down in flames with VaLinux, or it will be jettisoned.
I only wish I could see the smirk melting from ESR's face. What's his portfolio worth now?
Read the rest of this comment...
Here. In terms of code, this is how a start up runs:
if (Money Out > Money In && Stupid_Venture_Capitalists == 0)
decrease_money_out();
else
buy_superbowl_ads();
What did you eat today? http://www.atetoday.com/
Jon Katz I hope... please oh please oh please....
On a serious note....
.com pool of ca$h that have been sustaining a lot of companies for a while now.
/. still exists? Maybe this is a better question for Ask Slashdot, but I figure I'd post it here. If VA is laying off 25%, then the demise of the .coms is coming closer to home, and I'm wondering how this will affect /. and it's users.
/. on the side like in the old days? Will /. be immune to the .com deaths? I would have thought so, simply because of it's popularity, but if VA is cutting back, the the possibility exists. I wonder if the /. owners have thought that far ahead :)
Slashdot is owned by anover^Wva^Wwhoever, and it's owners (*wave* to taco and hemos) are paid from the
So what happens when that money runs out? Will
Will you guys (taco, hemos, cowboyneil, etc) continue on and try to scrape by with what you can get from t-shirts and banner ads, or will you go back to having a "real job" and doing
My ass. I've seen unions in action in the auto industry. There's a reason you really don't want a Pontiac built on a Friday afternoon, and that reason is the union.
.sig: Now legally binding!
Who should be pink-slipped? ( ) CmdrTaco ( ) Hemos ( ) Timothy ( ) CowboyNeal
Certainly this poll (as with most polls) is flawed. Only one choice? Axe the lot of them. Put in their place a hunk of code which takes stories off of The Onion instead. At least when you're reading those you KNOW they're bullshit.
They are a threat to free speech and must be silenced! - Andrea Chen
Fish! LipHo
First, I really put very little thought into writing proper English on slashdot. I don't proof read for it here. The only thing I care about is whether or not I'm conveying my message clearly. When the grammar is so poor as to make that difficult, then I care.
Second, you, and the vast majority of other users, know exactly what I meant.
Third, irregardless is a word, albeit a colloqial and not entirely accepted word. Please refer to Merriam-Webster's dictionary if you do not believe me. That is, incidentally, a little more than just "any" online dictionary, even if it is not quite OED. If you're reading slashdot, you're clearly more than willing and capable of reading broken english, never mind broken thought processes.
Fourth, I am more than capable of writing proper english when I so desire.
Fifth, if you're going to be a grammar nazi, please do yourself a favor and learn to spell grammar properly. Otherwise, the egg ends up on your face, not on your victim's face. Your comment is riddled with other flaws too. For instance, "meant" is the past participle and past tense of "mean", it simply does not fit in that sentence of yours.
QED
None of these internet companys are making any money... thousands of examples... but they'll give me a job!
When VA first went "underwater", I posted a
"Ask Slashdot" when we were going to get the "Meditations on Sudden Poverty" essay.
Too bad they never print any *interesting* Ask Slashdots...
While it's not appropriate for me to comment on too many things, I wanted to address concerns about SourceForge.net and SourceForge onsite (SFOS). So basically, during the , uh, shuffle, VA has had to decide where people will be cut and which areas of thebusiness will be concentrated on.
One of those areas is SourceForge and it's sister group, SFOS. SF and SFOS is super important to the future of VA from a bunch of angles. Dan Bressler, the product manager will be posting a reply to this note giving a brain dump on what's going on within. In short, SF has headcount and budget and we are looking to add staff on both teams. So that's the short post. Dan will post a more in depth piece. I wanted to get a place holder in for those who care about SF.
I'll answer other questions if I can, but for many questions, the answer can only legitimately be given by Pat Fossenier, our investor relations person.
Chris DiBona
Linux Community Evangelist, VA Linux Systems
--
Grant Chair, Linux Int.
Pres, SVLUG
Co-Editor, Open Sources
Open Source Program Manager, Google, Inc.
I know! Why not fire Jon Katz?!? He's a lazy no-good piece-of-shit dead weight anyway! Just tell everyone that if they can't right code to pack their shit and shove off!
Vertical consolidation is a great move for any company looking to increase their profitability, but in VA's case it wasn't even really vertical consolidation, it was, well, "diagonal" consolidation if anything.
It seemed at though they were attempting to go for prestige and "kudos" rather than a sound business model. They had absolutely no need to buy Andover - the two companies were in totally different businesses where the only tenuous link was Linux.
The trouble is is that VA is a hardware company at the end of the day. And their selling point was their Linux expertise. But who were they selling to? The geek market is more likely to be making their own computers and installing their own distros. The large corporate market is likely to have their own staff that can deal with installing and configuring Linux.
This left the dotcom companies as their target market. And given the fickle nature of the dotcom "revolution" this was always going to be risky. The growth period in internet companies is over, and VA are left with a smaller new market, and hence less potential revenue.
Don't blame consolidation, blame a risky business plan. The reason we're seeing so many cuts is that they're attempting to cutback now and avoid even bigger cuts later. It wouldn't suprise me if they did try and sell of OSDN and move back to their core business.
Jon Erikson, IT guru
- of three articles a day on Napster and P2P
- of the latest stupid way to cram linux into something better suited to be a toaster oven than a computer
- of three articles a day on why Open Source is the answer to the universe (we know it is already!)
- of the same article posted three times in the same day
- of links to 5 gigabyte video files
- of lists of things that people are tired of
- of goatsex
- of the lack of editorial review and a spell checker
- of people saying Athalon instead of Athlon and saying 'then' when they mean the comparitive 'than'
- of ten stories a day on some new stupid patent and why the government is collapsing next week because of stupid patents (we know already!)
- of clever signatures.
I'd like to see more ofSomeone you trust is one of us.
Wouldn't it have anything to do with that ?
É que os desafinados também têm um coração
We don't need
-Jon Katz
-Anonymous Cowards
-Trolls
Err, wait. That's about 80% of slashdot...
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Check out my blackbox styles
Who should be pink-slipped? ( ) CmdrTaco ( ) Hemos ( ) Timothy ( ) CowboyNeal
If you celebrate Xmas, befriend me (538
Sourceforge itself isn't in a very good state right now, the statistics are broken, cvs breaks often, shell breaks often, the compile farm just went back online, the list goes on.
I have a feeling its turned into the place where script kiddies can get a shell account to play around with, all they have to do is make up a project name, and set it's state to pre-alpha, or planning (as are a huge portion of the sourceforge projects)
We all wanted to stock market to sober up, but i don't think we relized how and where we would feel it. Sourceforge IMIO (i=ignorant) was a reaction to the OpenSource(tm) hype of 99/00, it has absolutly no way of making money, and must cost a decent amount to run.
Another site that might not make it till the end of the year is live365.com, they bassicly give anyone T3 bandwidth to anyone who wants to stream there mp3s. right now they seem to be scabbleing to make money, i don't think it's going to work out.
-Jon
Streamripper
this is my sig.
does anyone remember this ESR post? How he pompously declared that, now that VA Linux had gone IPO at a huge value he was absurdly rich. At least about 30 million dollars. While that isn't absurd in the traditional sense, it's a ludicrous amount of money for such a pompous, talent less, wanker. ESR isn't a 'hacker' he's a hack. Of course, based on his inane randite ideology the more money you had the more 'valuable' of a person you are. Look here:
Besides, it wouldn't be fair to dissemble. I serve a community. I'm wealthy today because my efforts to spread the idea of open source on behalf of that community helped galvanize the business world, and earned the respect and the trust of a lot of hackers. Larry thought that respect was an asset worth shelling out 150,000 shares of VA for.
Right, and now that 150,000 shares is worth just a tiny bit over a million, and hopefully going less. Assuming he didn't flip the stocks at the fist opportunity. Which I guess was June. But oh well. The sooner that idiot leaves the public eye, the better.
Amber Yuan 2k A.D
"and dear god does this website suck now." -- CmdrTaco
So, as a responsible and long-time member of the Slashdot community, I feel it is my duty to open nominations for which of the Slashdotters should be going -- voted off the island, if you would. I figure they owe VA one sacrifice after they issue a pink slip to the obvious choice (coughKatzcough).
I would like to place my vote for jamie, because he's got the same name as my ex-girlfriend (who dumped me rather painfully, I might add). That'll teach ya.
----
Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
Cool - nice to see you on here trying to put those who wonder in the know! But, this comment presents a problem:
Anyway, hope this clears up any concern.
Man, you must be kidding. Does that clear up the idea that SourceForge is going to loose a lot of people in the short term (IE, next 3-6 months)? Yep. Does that clear up the idea that in the longer term (1 - 2 years) SourceForge is going to have serious problem? Nope. I like the idea of SourceForge and all, but, it's still hard to see where all of this outlay is really getting VA it's money back. Sure, some of the projects get a fairly direct return back to VA when even nearly completed. But, take a look at the contents of SourceForge - very little of it really seems to apply. I mean, take a look at all those projects listed - a good number are half-ass thought out projects that are going to fail within the first two months because the creator of the project can't find people to help out or just plain old can develop the idea they came up with. Heck if I get another offer to join so-and-so's VB game project, complete with a link to a SourceForge project, I'm going to SHOOT SOMEONE! (Especially when I look, and there's not even a 'design' behind the game yet. *SIGH*)
It's hard to see where that much, well... random crap that SourceForge is having to support in terms of bandwidth, storage, and support requests really do much to contribute to VA's business. I'd probably have more faith in it if there was an approval process or something - IE, users submit a written request for the privilage of hosting a project on SourceForge. Something that makes them stop and think about what they are doing, instead of letting SourceForge become the GeoCities of Open Source projects. For every good project like CrystalSpace3D, there's now 3 projects in the 'pre-alpha' stage with no chance of getting any farther.
Anyway - I don't mean to sound like a troll or flamer who's saying it can't ever work, etc. Just pointing out what I've been seeing and have been heavily concerned about on SourceForge. On the flipside of those concerns, I think it's great that SourceForge exists, and provides access to a collaborative environment for Open Source developers with a minimum of hastle!
Davis Ray Sickmon, Jr - looking for something to read? Check out my three free novels at MidnightRyder.org
The reason VA cut staff that much was that the cost of capital was very high. As my old finance prof said, "no one with any sense loans a tech company money." So, what do they do? They have to issue equity, which dilutes the value existing shares.
Quick example: say I have 1M shares outstanding worth $5 each. I need to raise $1M. This means I can issue another .2M shares, which basically means, since the company has no more assets, that each share is worth 5/6 (1M old shares / 1.2M new shares) what it was before. That's what dilution means.
This requires the permission of the shareholders, who are basically therefore asked to vote on two possibilities:
Let's say you own 100,000 shares of VA and that the vote is therefore: "Do I want my $700k investment to be worth $500k in a year or $1,000k in a year?"
Any sane shareholder is going to say, "I want you to increase the value of my investment in your company." Right? Remember, the whole purpose of the company is to make the shareholders money.
So that's why the layoffs.
It's not a personal thing, it's just that they had to operate based on expectations. They were wrong. A lot of companies were wrong.
_Deirdre
had to say it. ;)
Comment removed based on user account deletion
One of the problems with the IT industry is the absence of unions to protect the workers. This allows management to get away with abuses that would be impossible in traditional work environments.
I have it on good authority that VA is implementing it's 25% reduction is staff size by amputating all employee's legs at the kneecap. Clearly this is an abuse of the employer/employee relationship and we must do something about it.
The IT industry needs unions to prevent further incidents such as this. In the words of Joe Hill, "Don't weep for me boys, organize."
--Perdida