In the quarter ended July 31, Novell saw profits fall 92 percent year over year to $2.14 million, or break-even per share, from $23.4 million, or 6 cents per share. Sales fell 4.7 percent to $290.2 million.

For the quarter ended Oct. 31, Wall Street's consensus expectation is for Novell to turn a profit of 3 cents per share on revenues of $301.4 million. For the year, Wall Street expects revenues of about $1.18 billion.

"The key driver in this cost reduction is to focus more of our resources on our growth areas," Joseph S. Tibbetts Jr., senior vice president and chief financial officer, said in a statement. "By doing so, we will be able to reduce product development expenses, consolidate our worldwide operations, better focus our marketing efforts and realize operational efficiencies in the general and administrative function.

"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."

Novell's stock price was unchanged Wednesday at $7.47 per share. During the past year, the price has ranged from $4.94 to $7.77.

Novell said the full effect of the cost reductions announced Wednesday is expected to be realized in the first fiscal quarter, which ends Jan. 31.

The company also said its board of directors has given the OK for management and financial adviser Citigroup Corporate and Investment Banking to "explore strategic alternatives" to Novell's consulting subsidiary, Celerant. The company already had said it will separate Celerant from Novell sometime in the future.

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Cutback facts

Employees affected: About 600 in a 5,800-member work force

Employees affected in Provo: About 200 in a local work force of about 2,000

Effective: Immediately for those in the U.S.

Expected restructuring savings: About $110 million annually

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E-mail: bwallace@desnews.com