Novell moved to reassure its UK users this week after the company
announced redundancies of 5% of its workforce following
"disappointing" second quarter results.
The 260 jobs - including some in research and development - will be
shed from the end of the month.
Steve Brown, regional director for Novell, said most of the
redundancies will be in the US, with minimal European impact. "It
is business as usual. The redundancies are part of Novell's
transition from a pure product company to one which is more
services oriented."
But Judy Jerome, information analyst with Bloor Research, was wary.
"Any subscriber should be nervous if a supplier appears to be on a
downswing.
"If there are service level agreements, users should contact Novell
to ensure that there will be no effect on service," she said.
Gary Cooper, director of research with Butler Group, echoed
analysts concerns. "You have to be concerned when any organisation
announces redundancies. And job cuts in research and development
are a particular worry: does it have implications for how the
company will be moving forward in terms of the product set?
"One has to wonder whether these cuts can be absorbed by Novell's
infrastructure or are the tip of an iceberg. Is it a sign Novell is
scaling down?"
The company reported losses of £105m against sales of £168m, but
said it expects to return to profitability by the end of the
year.
Antony Adshead
antony.adshead@rbi.co.uk