"Well, the rumours were 25%, so there you go". That’s the reaction of Novell customer Calum MacLeod to the news that Novell laid off 16% of its staff in the US after several quarters of weak profitability.
The networking company’s move to slash its operating costs in the wake of poor financial results has left a sour taste with MacLeod, who is IT manager at the Auckland University of Technology.
“We’re keeping an eye on things for sure, but it doesn’t mean that their product stops working. It’s still reliable and still does a good job.”
AUT uses NetWare, NetWare NDS, ZenWorks and Groupwise.
Auckland Regional Council IS manager Tony Darby expresses similar views.
“From time to time organisations have to review what they’re doing and make sure they’re in line with what the market is demanding.”
Darby points out that the situation is similar to a round of redundancies Novell made in 1997, involving similar numbers of employees.
“We don’t like to hear that type of news any time but they know their business. The fact of the matter is that their products are so good.”
Craig Harrison, network manager for Diocesan School for Girls and head of the New Zealand Novell user group, says as long as the company continues to provide the same level of services and products, how they reorganise internally to do that is a matter for Novell.
Novell New Zealand general manager Peter Revell was briefed on the 900 redundancies by Novell CEO Eric Schmidt at 3am last Thursday.
He says the New Zealand operation is still hiring staff and no one will be laid off.
Revell believes Novell customers understand the reasons for the move and doesn’t think there will be too much adverse reaction.
“I think their main concern will be whether this affects our strategy and one of the things that came through very strongly from the briefing is absolutely not.”
The personnel reduction leaves Novell with 4600 employees and about an extra $US45 million each quarter. About $US20 million of that savings will be spent on developing Novell's Internet services business, according to Novell's vice president of investor relations, Peter Troop.
Novell reorganised its internal operations in late May into four divisions: directory, management, Internet content and services. The layoffs reflect that reorganisation and will help bring personnel levels in line with the new structure, says Troop.