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02.05.09

Novell Layoffs May Have Not Been Announced Yet

Posted in Europe, Finance, Microsoft, Novell at 10:17 am by Dr. Roy Schestowitz

100 layoffs merely seismic waves?

LARGE-SCALE Microsoft layoffs have only gotten started according to analysts, but it’s not the exception. Microsoft is likely to have more than one ‘wave’ of layoffs. Its subsidiaries are likely to suffer a similar fate, as they already have [1, 2].

Back in November, Novell was shutting down offices across Europe and German employees of Novell have apparently just discovered/uttered this thing:

“The day after Hovsepian said no more cuts beyond 100, he told German employees (as per German law) that there would be more cuts coming,” the source said.

It also seems that the 100 or so that have been announced could be a conservative count, with this initial round going deeper.

“I’m hearing from all over the company that, in fact, the cuts are deeper than ’100 employees,’” the source said.

[...]

It doesn’t take a nuclear physicist to conclude the actual number could lay somewhere between 100 and 1,000.

2.5% in terms of layoffs seemed rather low considering the fact that the company had made only minimal adjustments. The person who talked about these adjustments quit the company a few weeks ago. Novell still operates at a significant loss and it loses business (core business like Netware). Some say it might be acquired by Microsoft one day and Novell was recently voted the least likely technology company to survive 2009.

Eric Lai’s 'damage control' report in ComputerWorld (later it spread itself to other IDG domains) refuted a seemingly inaccurate report from CNET, but it was not able to altogether rule out layoffs. Novell was forced to say something.

Lai’s report was followed by many more, such as:

I. Novell confirms 100 layoffs

The open source vendor Novell on Saturday confirmed that the company was trimming its workforce by less than 100 people, considerably fewer than had been anticipated.

II. Novell cuts 100 workers

As layoffs go, the ones that took place last week at commercial operating system maker Novell were pretty small, and a lot less than was originally reported out there on the Web.

III. Novell axes 100 staff

Novell has confirmed it has laid off around 100 staff after reports of much higher numbers of lay-offs started circulating last week.

IV. Novell dispels rumours but loses 100 workers

As Novell employs around 4,200 people worldwide, the figure represents just 2.3 per cent of the workforce. Some sources had predicted that up to 25 per cent could be handed their marching orders.

There’s no guessing what may happen next. Could the report from CNET actually be right?

As a side note, later we discovered that editors and writers of IDG were being laid off as well.

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7 Comments

  1. aeshna23 said,

    February 5, 2009 at 1:42 pm

    Gravatar

    Does anyone have any thoughts on whether Microsoft’s outright buying of Novell would hurt Linux? I have some fears around this issue, but perhaps someone has another perspective.

  2. Jose_X said,

    February 5, 2009 at 4:01 pm

    Gravatar

    >> Does anyone have any thoughts on whether Microsoft’s outright buying of Novell would hurt Linux?

    You sound like you are trolling big-time. And do you mean to suggest by this comment that Linux is not being hurt now?

    I’ll bite…

    Right now Novell are Microsoft’s GPL mittens.

    Microsoft has many preferred partnerships, companies that get very special treatment to help further Microsoft’s goals. One reason they aren’t bought is that antitrust rules would kick in.

    Novell is also Microsoft’s ambassador to the FOSS world (or the traitorous servant that opens the back door to let them in and clean you out.. take your pick).

    Really, it’s cheaper not to buy. Keeping “illegitimate children” around or court jesters or whatever is a cheap way to get others to grovel at your feet but cost only a fraction. Leadership hierarchies of companies that are Microsoft partners ensure that only a very few (select few at the top mainly) have to get paid handsomely. Microsoft has many special partners (some more special than others). This partner network helps them keep their monopolies. It would be too expensive to pay market value for each company. And it’s more fun to keep them competing with each other for attention.

    Novell, VMware, etc, channels and talent will very possibly one day be in the cleaning out stages. Let the stockholders that weren’t savvy be left with the shell companies. [in the case where the partner doesn't make it into the next level]

    Microsoft gains with Novell on the side and they may very well dump them tomorrow anyway. Why buy when you can take everything you need much cheaper through other means? Novell could belong to the court and get greater privileges than a serf, but still cost a lot less than the actual King, Queen, Princes(ses), etc.

    Microsoft has ex-employees working in other companies likely contributing towards Microsoft ends. These people are closer to the “family” than most that would be picked up in an acquisition. They’ll save their million dollar bills for their extended family.

    So, I don’t know where Novell will end up.

    Look, Novell is helping to grow Microsoft’s platform hooks and is sharing their intelligence with Microsoft. They’re being useful to Microsoft right where they are. Whether they get bought entirely, have some of their assets bought (or stolen), or whatever is a detail as far as I’m concerned.

    Novell might also serve as a magnet to attract those developers in love with Microsoft. If these will grovel for cheap.. if these still have a few moral bits left.. they likely will be cheaper and as useful if kept in the pool of illegitimates. Although particularly low-moral ones can serve well here, as well. [To keep things simple, I'm using "low morals" to cover things like "every man for himself".]

    I’m probably off, but this is roughly how I view Microsoft’s world and Microsoft’s attitude towards it. Yes, some will benefit, at a cost to most everyone else.

    [Hey, I’m in the rant posting business “today” http://boycottnovell.com/2009/02/05/microsoft-emc-vmware-for-patents/#comment-59419 . No, it’s probably coincidence.]

  3. aeshna23 said,

    February 5, 2009 at 7:50 pm

    Gravatar

    >>You sound like you are trolling big-time. And do you mean to suggest by this comment that Linux is not being hurt now?

    Just for the record, I’m sincerely interested in the topic. I’m concerned about the patents that Novell has.

  4. Roy Schestowitz said,

    February 5, 2009 at 8:02 pm

    Gravatar

    aeshna23,

    The downside of never censoring comments is that people become suspects until proven otherwise. ;-)

    Jose_X,

    aeshna23 is with the white team, not Dark Forces. ;-)

  5. NotZed said,

    February 5, 2009 at 8:24 pm

    Gravatar

    I agree with Jose – it is much better for them not to buy Novell.

    - Brand would be damaged much more, apart from the gnu/linux guys, there’s all the netware and groupwise people with long memories.
    - Possible regulatory interest which is currently avoided.
    - Better ‘wedge’ potential as it is, e.g. now redhat has to counter two heads, rather than one, one of which is blurringly similar to themselves on the surface.
    - Mono being an independent project lends tremendous legitimacy to the ecma standard and `cross platform’ claims.
    - There would be something of an engineering exodus. It may be delayed by the dire economy but it would happen eventually.

    etc.etc.

    I wouldn’t pick on the `morals’ of the employees – Novell is a pretty good place to work, they pay well, have good benefits, and have quite a few interesting things to work on. HR are jerks, but that’s their job.

    I think the intent of the original question was regarding a more direct impact on linux itself? Novell has a lot of IP related to Unix, and probably a lot of other IP related to modern computing in general e.g. networking, security, authentication and authorisation – identity management, and so forth. In that regard it could be an issue.

    Not to mention controlling a large number of developers – even if many got pissed off and left.

    But they’d be better off funding/encouraging a proxy to buy them in almost all of these cases, if it came down to that.

    And i’m sure both Sun and IBM, and Google would have something to say about it – they have much more to lose than the free software community.

    I doubt they’re going `down’ any time soon though, a few layoffs is expected in the current economic climate. Just as a lower-than-expected profit for MS isn’t even close to the end of redmond.

    And being laid off really sucks, hopefully those who are have planned for this, or can find work elsewhere.

  6. Roy Schestowitz said,

    February 5, 2009 at 8:30 pm

    Gravatar

    IIRC (I have not checked my notes), Novell lost $16 million in the last quarter. Assuming about $16k per head, the scale of layoffs cited by Asay makes sense to me, but what do I know?

  7. Jose_X said,

    February 5, 2009 at 9:17 pm

    Gravatar

    On various topics, I get *very* spirited. Hopefully no one will take it personally (I’ll have to keep remembering to watch my language).

    The morals thing and Microsoft love thing I mentioned was a little below the belt. The thing is that it would not shock me if I were to find out that Microsoft studies and classifies targets to some degree (whether accurate or not), always trying to get for free what they might otherwise buy, and always trying to find a way to vanquish the opponent. It’s about $$. Deception is effective and efficient.

    I don’t know much about Novell’s patents though we certainly got an idea with SCOX-aga that they own something.

    I don’t worry about copyrights, and I have never worried too much about patents. I do hope Bilski helps a lot.

    I think the sanest approach to avoiding/defending against patents is to always try to come up with something through your own way or to try to stick to a wide mix of things. In a group atmosphere, you would have to place trust on the components. Having a mixed bag is safest (not putting all eggs in same basket). Not sure what would happen in court, but I feel I would try to defend my position vigorously if there was a record of how some result was achieved (as opposed to having copied or borrowed). This would make easier arguing that the “invention” was not that amazing to begin with. [Of course, the point of FOSS is that you borrow as much as reasonable.] Also, there are groups that will disclaim various things. Stay away from particular situations if there is reason to think the patent risks are already elevated. When you have enough understanding of the material, you can more quickly and effectively route around should you be pressured to do so. Etc.

    When these things are done, you minimize the odds of a case 1/4 (vs 2/3) http://boycottnovell.com/2009/02/04/the-api-trap-part-1/ .

    Finally, patents aren’t my only concern by a long shot; however, even there, if I were to have to pay or to have to abandon something, I’d rather it be because of someone I trusted and/or is small or something like that. You give people a chance.. just not 20. And the group attacking should realize they have something genuine to lose by turning against you. How high might the damage be? Etc.

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