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Novell Layoffs Coming This Month?
Roblimo writes "Multiple sources close to and inside Novell have told us the company expects to lay off between 10% and 15% of all employees by the end of October. '...shareholders have suggested that Novell divest itself of its consulting group and GroupWise division, while at the same time instituting personnel cuts across the board to bring expenses more in line with revenues,' writes business columnist Lauren Rudd at NewsForge, who also notes that '[Novell's] NetWare revenue stream continues to deteriorate, declining by $36 million in fiscal 2004, excluding the impact of favorable foreign exchange rates.'" NewsForge is part of the same family of companies as Slashdot.
So again, why is Novell laying off people "Your Rights Online"?
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
Sorry, but if NetWare is dying, it's going to take Groupwise with it to the grave. Nobody ever bought GW for any reason other than the fact that it was the only decent mail system that ran on Netware/NDS.
Also, the writing has been on the wall for NetWare for 10 years. Novell had plenty of time to build up other revenue streams, and the fact that they're belatedly farting around with profit-free Linux products just means they are going to get what's been coming to them for a long time.
Novell has all the components of a solid business, just not the vision. Just look at their homepage - does it tell you who they are or what they have planned for the future?
"God fights on the side with the best artillery." - Napoleon, Marshal of France - speaking truth to power
"...shareholders have suggested that Novell divest itself of its consulting group and GroupWise division..."
In other news, shareholders have also suggested that Microsoft needs to dump Office, and Apple should just stop with the iPod thing already.
You know, eDirectory is nice and all, but I promise you there are more than a few Netware shops out there who continue to be Netware shops primarly because of Groupwise.
Well, our thoughts are with Novell's staffers, surely. Losing your job is horrible.
That said, there have been articles about Novell's financial outlook for a long while now and they've all pointed in the same direction: cash out greater than cash in, result misery. It's Mr Micawber all over.
Hard to feel much sympathy for the major stockholders, though. Novell's strategy has always been a real gamble: growing a Linux base fast enough to offset the declining Netware and other bases. In essence, a race against time that the stockholders would have known was a real gamble. Even so, the recovery strategy outlined doesn't really add up. If you return the cash pile to the stockholders and sell off non-core and non-performing assets, you aren't left with much. And if you decimate R&D then Netware (which still has a lot of customers) could start to decline very fast indeed as users decide en masse that they are dealing with a husk or shell. That means Novell would be left standing with little more than Linux and therefore a juicy morsel for a takeover.
Hmmn, I wonder if the Wall Street sharks are busy circling, sensing rich pickings from a squabble because damage to SUSE would be a tremendous embarrassment to a lender of last resort, namely IBM.
Either way, in SUSE Linux Novell has one of the real jewels of the f/oss world, imho. They've put a lot of funds into SUSE and into other aspects of open source that benefit us all.
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When I spoke with a salesmen about becoming a potential reseller/OEM of Suse, the salesman I was speaking with said "If you're only going to sell 2 or 3 licenses a month it's not worth my time. We want large deployments." He said that about 5 times in a 15 minute conversation.
I might not be a $1mil/mth salesman, but I can tell you from a purchaser's perspective it doesn't matter how much or how little you sell, being told @#$% like that really just flat out ticks a person off. The specific job I was bidding on would have been 50 desktop licenses and 2 servers, but because of that kind of comments that were repeatedly said to me...well, Redhat won the contract instead of Suse.
I've never really been impressed with Suse in the first place, but the customer had heard good things about it and wanted to go that direction to replace MS desktops and Novell servers in their business. After explaining the situation I had run into with the Suse sale tactics, they decided to follow my previous suggestion. So not only did they lose a customer that had specifically requested it, they lost a company that would have been selling their products and promoting it.
So yeah, doing B.S. like that is going to hurt the bottom line and one can only hope that the salesman I spoke with is one that ends up on the unemployment line. Granted, it would take ALOT more than that to make me consider Suse again simply because that guy should NEVER have been allowed to be talking to the public about buying products.
A little history first. In the early 90s Novell was doing less than $500 million in revenue, but they were experiencing astounding growth. They were pulling in profit margins in the 80% range and the net income was in the hundreds of millions. By 1995 they were doing $2 billion in sales, after that things aren't quite so rosey. In two years Novell lost half of their 1995 revenue and were down to $1 billion in sales and net income on average was in the tens of millions. The peachy days of 80% profit margins and 50% year over year growth were gone. Up to today Novell has done a good job of maintaining their level of revenue at around $1 billion per year, however, the margins and net income are still in the gutter.
As one of the average guys I hate it when we get nailed with layoffs, however, in 1995 when revenues were at the $2 billion level there were just over 7,000 employees at Novell, today at $1 billion in revenue there are over 6,000. To bring expenses in line with revenues I think there is no choice but to cut the head count. It sucks but its a fact.
I don't think this spells the end for Novell and I don't think the open source projects supported by Novell need to worry, that is where Novell's future will be made. And Novell does have a future. If you look at how well Novell managed to hang on to their business with $1 billion in revenue from 1995 to 2005 with Microsoft trying to kill them off I think its obvious they still have lots of fight left in them. Now with open source upsetting the balance in the market Novell seems to be aligning themselves with the change. I think they are doing the right thing and they will succeed.