Novell cuts workforce

Novell, Inc., last week, disclosed that Eric Schmidt stepped down as chairman of the networking supplier and will be replaced by President and CEO Jack Messman, who joined the firm last year with the acquisition of Cambridge Technology Partners. At the same time, struggling Novell disclosed plans to eliminate 1,400 positions, or 19% of its workforce.

Officials said the restructuring was undertaken in an effort to restore profitability while more quickly creating new solutions by a more rapid consolidation of CTP into the Novell fold.

"Novell is becoming a more aggressive company, adopting solution delivery and support capabilities across every aspect of our business," Messman said. He added that the the company is projecting that it will realize the full benefit of savings from the actions—estimated at approximately $200 million annually—early next year.

The moves were made as Novell enters a new fiscal year, and begins to implement its so-called Net services product strategy and one Net vision to support e-business solutions.

Novell officials said the firm hopes the restructuring can align the combined organizations and redesign business processes. The moves were also said to be a response to the overall decline in the IT market, the oversupply of IT consulting services capabilities, and expectations that the IT market will be slow to recover in 2002.

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About the Author

Mike Bucken is former Editor-in-Chief of Application Development Trends magazine.