More Novell layoffs in '08

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More layoffs are expected next year at Novell Inc. after the Waltham, Mass. software maker disclosed in a federal filing Thursday plans to extend a restructuring effort in a two-year strategy to shore up profitability.

It currently has 4,100 workers companywide including 1,200 in Provo.

Shares of Novell dipped 1 cent or 0.14 percent to close Thursday's trading at $7.10. But in after-hours trading, the stock shed nearly 10 percent to $6.41 a share after the company released its fourth quarter and fiscal 2007 earnings results.

In documents filed with the U.S. Securities and Exchange Commission, Novell said it amended its restructuring plan on Wednesday to reflect an additional $15 million to $25 million in restructuring expenses it expects to incur through fiscal 2008. Of that amount, employee severance arrangements will account for between $12 million and $22 million.

Novell, which launched its restructuring effort in the fourth quarter of 2006, also expects to consolidate more facilities next year and hopes to complete its restructuring by Oct. 31, 2008.

"We don't have specifics on what additional employee reductions this might entail, of whether Provo would be impacted," said Bruce Lowry, Novell's spokesman in an e-mailed statement Thursday. "As Ron (Hovsepian, president and CEO of Novell) did this year, he'll update the market each quarter as we take restructuring steps over the course of fiscal 2008."

Thursday's announcement of more layoffs comes on the heels of Novell's termination of 250 software development and engineering positions in the U.S. -- including 200 from Provo in October. The majority of those jobs were offshored to its research and development center in Bangalore, India.

Since its restructuring effort began in 2006, Novell has incurred $47 million in restructuring expenses, and laid off 300 workers companywide, Lowry said. Earlier in February, Novell said in SEC filings it expected the costs to total between $35 million and $45 million and that the plan would be "substantially completed" by the end of fiscal 2007.

Meanwhile, the company reported a net loss of $17.9 million, or five cents loss per share for the fourth quarter ended Oct. 31, compared with net income of $19.9 million, or five cents a share a year ago, due in part to a sale of its Switzerland-based business management consulting unit. Analysts polled by Thomson Financial expected earnings of 4 cents per share.

The company said its earnings included a loss of 3 cents per share from the Swiss unit, which it agreed to sell during the fourth quarter. All financial results for this unit were excluded from the fourth quarter's earnings report.

"We're aligning our consulting and services business very much around our products, which is why we sold off this business management consulting group," Lowry said in an e-mailed statement. The Swiss unit had 165 workers.

Excluding $6 million from the Swiss unit, Novell's total revenues reached $244.9 million for the fourth quarter, up 4.7 percent from $233.8 million a year ago. Its revenue growth was led by a 69 percent jump in revenues in its open platform solutions division. Most of that revenue came from Linux platform products, the company said.

For fiscal 2007, Novell reported net losses of $44.5 million, compared with net income of $18.7 million a year ago. The company's total net revenues rose to $932.5 million, from $919.3 million a year ago.

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