Novell lays off 200 in Provo

Novell Inc. laid off about 200 workers in Provo on Wednesday as part of an overall restructuring the company believes will save it more than $110 million annually.

The job cuts equate to about 10 percent of the company's Provo work force and were part of an overall head-count reduction of about 600 positions. Employees in Provo were notified Wednesday in one-on-one meetings, and their layoffs were effective immediately.

"We're undergoing some restructuring," said Kevan Barney, a Novell spokesman in Utah. "What we're talking about is a reduction in head count. The rationale is a concentration of our resources on what we have identified as our key growth opportunities in Linux and open-source and identity and resource management."

Huge layoffs at the software company had been the source of speculation for the past two weeks. Early reports, citing unnamed sources at the company, said up to 20 percent of Novell's work force would be let go. A more-specific report, based on "a source close to the company," indicated 300 workers would be laid off in Waltham, Mass., and at least that many jobs would be lost in Provo as the company jettisoned 1,000 people. Throughout, the company declined to respond, citing a policy of declining to comment on rumor and speculation.

Novell switched its headquarters from Provo to Waltham in January 2004, although top executives had run the company from the community near Boston for several months prior to that.

While not providing details about functional areas hit hardest by the cuts, Barney said Novell has spent above the industry average in research and development the past couple years as it embraced Linux, a popular and free computer operating system built through the contributions of developers worldwide.

"This restructuring will bring us more in line with industry norms in terms of R&D," he said.

Prior to Wednesday's announcement, Novell had about 5,800 employees, with about 2,000 in Provo.

Barney said about half the cuts would take place outside North America. Affected employees will be offered severance packages consistent with industry norms based on their positions and longevity with the company, as well as outplacement services, he said.

The job cuts are the largest for the company since November 2001, when Novell eliminated 1,400 positions, or about 19 percent of its overall work force, although only about 84 jobs were lost in Provo.

In late 2003, Novell acquired Germany-based SuSE Linux, a Linux software and services company, as a way to expand its ability to provide enterprise-class services and support on the Linux platform — one that is "open-source" instead of based on proprietary underpinnings.