Novell President: Layoffs, Other Cost-Control Measures Upcoming

Novell's new president said the company plans layoffs and will cut off "noncore" assets to control costs and improve operational efficiencies.

At the Open Source Business Conference (OSBC) East in Newton, Mass., on Wednesday, Novell President Ron Hovsepian wouldn’t comment on the number of layoffs but said the software vendor’s cost-cutting measures will be announced soon.

"We're going to get things in alignment. We're trying to be as sensitive as possible to employees, but the realities are we're making sure we're in line with our resources," Hovsepian told CRN after his keynote speech at the OSBC event. "We can't let them get out of balance."

Waltham, Mass.-based Novell currently employs 5,800, a company spokesman said. Sources familiar with Novell’s plans have indictated that the company may cut as much as 20 percent of its workforce.

Novell has been communicating with employees and plans to disclose more information after quarterly earnings are announced and at the company's first global sales summit in five years in Provo, Utah, Hovsepian said. Novell also plans to reassign resources as it cuts head count, work more closely with distribution partners and provide sales tools to help partners sell the value of migrating to Linux, he said.

In addition, Novell will reallocate resources, focus on growth opportunities such as Linux and identity management, and spin off ancillary properties, according to Hovsepian. He hinted that a likely target is Celerant, a Novell-owned content delivery provider that’s treated separately from Novell's earnings.

"We've tried to do a lot of things for customers. But there will be much less diffusion [of software products]," Hovespian said. "[Celerant] is a noncore business. Stay tuned."

Before his promotion was announced Monday, Hovsepian was Novell’s vice president of worldwide sales and, prior to that, served as the company’s president of North America. In his new role, Hovsepian said he aims to take a global approach and try to grow Novell’s Linux business, but he noted taht the company won’t shed its flagship NetWare product

"We have no active desire to sell these pieces or move out of this space," Hovsepian said. "I don't see it going away."

During his keynote, Hovsepian criticized a prediction by the research firm Gartner that there will only be two operating systems left in 2010: Windows and Linux. "The propensity of the operating system will be Windows and Linux, but there will be some [operating systems] that hang around. Let's not be naive," he said.