Monday, October 31, 2005

The axe falls in Provo

As I indicated in a reply to a comment earlier this month, rumors regarding Novell layoffs are rarely false. Sometimes the figures are wrong, and the timelines aren't well known, but both are easily guessed.

Thursday, Information Week reported that the big red "N" will in fact be eliminating around 1,000 jobs. The good news to me, is that many of the jobs on the block are in the Consulting branch. The acquisition of Cambridge Consulting was done more for Jack Messman than for their bench of consultants - these people had very few practical implementation skills that could translate to Novell products, and the reputation & quality of Novell Consulting in America suffered as a result. Making matters worse, much of the Consulting group's management were replaced with Cambridge staff - these people had very different, borderline incompatible views of Consulting's role within Novell and to their customers. Their departure is long overdue.

I'm not certain what the signifigance of firings in the SuSE group in Germany may be, but I expect these are redundancies which have developed post-acquisition and are to be expected.

What does concern me is that Novell is losing market share, losing customers, not servicing existing customers well, experiencing flat stock price trends for years on end, and yet is still accumulating cash reserves. In fact, the reported $1.6 billion of cash-on-hand is nearly double what it was two or three years ago.

One of the principles of personal finances is that you don't save aggressively when you're paying off debt - you eliminate the debt first. Novell is being fiscally prudent, but is being irresponsible with its handling of debt in the areas of market share and PR.

I hope that some of the 1,000+ job cuts also spell the death of some sacred cows which have been roaming the halls of Provo for far too long.

2 comments:

Jeremy said...

Hi Zenmaster,

Its hard to find out whats happening with Novell...

No new information on Novell.com, Slashdot, Theregister or Abend.org.

I've spoke to our vendor to try and find out what's happening in Australia.

Regards
Jeremy

PS The only reason that Novell's cash reserves are so high at present is probably due to a legal victory last year against M$

ZEN Master said...

Here's an update for you Jeremy (by the way, even if you can't get a subscription delivered, patronize this publisher).

http://www.computerworld.com/managementtopics/management/story/0,10801,105877,00.html?source=NLT_PM&nid=105877

Looks as if the first wave that Novell will discuss is 10% of employees (600 individuals). GroupWise and ZEN appear to be safe - which is good, as those products pay the bills for the rest of the company's goofball endeavors.