Economic downturn hits SuSE Linux

European Linux distributor SuSE Linux has axed over 20% of its staff, but claims it will turn over a profit by the first quarter...

European Linux distributor SuSE Linux has axed over 20% of its staff, but claims it will turn over a profit by the first quarter of next year.

The company has made 120 of its 500 staff redundant and in the process has closed its central call centre. All service calls other than support, have now been outsourced.

SuSE is also reorganising its business into no more than five distinct business groups, to enable it to focus more closely on its specific markets.

The business units will focus on qualified users such as traditional Linux customers, the SME sector, enterprise and corporate customers, and IT companies.

"Traditionally we have been very technology focused," explained Malcolm Yates, SuSE's strategic alliance manager. "We have realised that we have need to get some commercial balance from the outside."

The changes and the job cuts follow some difficult months for SuSE. In August it lost its second chief executive officer of this year, and the job cuts are the third round the company has made since March. However, SuSE is keen to point out that the staff who have been made redundant have been located at the firm's German headquarters and its US sites.

SuSE's strategy is now focused on partners and the channel, which handle all of the company's sales with the exception of those conducted online. The company has just two sales staff in the UK now.

The company has also secured £10m in venture capital funding. "This money is fairly important because we are in the process of restructuring and redeveloping SuSE's strategy," said commercial director Jasmin Ul-Haque. "We do need to have additional funding to put in place a lot of the changes we need to make."

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