Grace Leong - DAILY HERALD | Posted: Monday, October 15, 2007 11:00 pm
Software developer's Provo operations to shed 200 jobs, offshoring positions to India
Novell is laying off 250 software development positions in the United States and offshoring the majority of these to its operations in Bangalore, India. The company announced the layoffs to its workers today.
Of the 250 affected, 200 are from its Provo office and the remainder are from Novell's other offices nationwide, Kevan Barney, Novell's senior manager of public relations told the Daily Herald today.
The layoffs will take effect this week and the affected workers will receive severance pay and outplacement services. After the layoffs, Novell, which has a total of 4,600 workers companywide, will have 1,200 workers in Provo.
The restructuring of Novell's operations, which began in February, is estimated to total between $35 million and $45 million over the course of its 2007 fiscal year. The final restructuring costs will be detailed in the company's fourth quarter and fiscal 2007 earnings report to be released in the coming weeks.
"The most successful tech companies have a mix of onshore and offshore engineering resources," Barney said. "Provo is still the largest single facility for us companywide and worldwide. The skills that our Provo employees bring are significant. Unfortunately, the realities of working in a global market mean these things do happen. To compete in the global markets, we have to do this. It's a pragmatic approach, and necessary to compete."
In the past few years, many of the jobs going overseas, especially to India, are high-end research and engineering jobs because the talent abroad is not only cheaper, but well-educated. Many of India's top engineers and tech workers are educated at the Indian Institutes of Technology, a group of top technology institutes in India, one of which was set up with the assistance of Massachusetts Institute of Technology.
Barney couldn't immediately specify how many workers Novell has in India. But he said the size of Novell's software development center in India is now comparable to what it has in Germany, making both the second largest development centers for the company.