PROVO, Utah – Networking software maker Novell Inc. Thursday said it would slash about 1,400 jobs, or 19 percent of its work force, as it struggles to regain profitability in an information technology market which it expects will be slow to recover next year.
Novell also said it would write off the value of certain assets and book charges $90 million in the fourth quarter.
Novell, which acquired the struggling technology consulting firm Cambridge Technology Partners over the summer, said it expects fourth-quarter revenue of $306 million and a profit of 1 cent per share, excluding the restructuring and asset-impairment charges. The results, it said, are generally in line with earlier guidance.
"Novell is also responding to the overall decline in the IT market, the oversupply of IT consulting services capabilities, and expectations that the IT market will be slow to recover in 2002," the Provo, Utah, company said in a statement.
The layoffs will reduce Novell's work force by 1,400 positions to about 6,000 worldwide, Novell said.
The moves comes two days after Novell Chief Executive Officer Jack Messman assumed the additional post of chairman, ending the tenure of Novell former chief Eric Schmidt, now CEO of Internet search engine Google Inc. Messman, the former head of Cambridge Tech, became CEO in July when Novell completed the acquisition of the Cambridge, Massachusetts-based consultancy.
By the second half of fiscal 2002, Novell said it expects to see about $200 million in annual savings from the cuts.
Novell shares closed Wednesday at $3.99 on Nasdaq. The stock is down more than 90 percent from its all-time high of more than $43 in February 2000, at the peak of the tech-stock boom, and down more than 20 percent since the beginning of this year.