May 29, 1997 in Nation/World

Novell Cuts 1,000 Jobs, Reports Loss Troubled Software Company To Focus On Internet Products

Kimberley Murphy Associated Press
 

Novell Inc. said Wednesday it will lay off 1,000 employees, or about 18 percent of its work force, as it tries to streamline its business to focus on Internet software.

Novell also reported that its second-quarter losses shrank to $14.6 million, but said it had disappointing sales of software products sold through distributors.

The layoffs will leave Novell with 4,800 employees worldwide. The company had 7,000 employees before selling its WordPerfect word processor and Unix operating system businesses over the past two years.

In addition to the job cuts, Novell plans to reduce its inventory in the third quarter by reducing shipments to distributors, which will result in an operating loss for the quarter.

The third quarter also will include costs of $25 million to $35 million to pay for the layoffs. The cuts include 100 layoffs in Europe.

For the second quarter ended April 30, Novell’s losses equaled 4 cents a share, compared with losses of $55.4 million, or 15 cents a share, in the same period last year.

Overall sales rose 45 percent to $273.1 million from $188.2 million.

Novell still is the leading seller of operating systems used to control personal computer networks. But growth of PC networks has slowed, and Microsoft Corp. is targeting Novell’s business with its Windows NT operating system, which can perform many functions of Novell’s flagship Netware.


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