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Novell To Lay Off 600 Amid Corporate Restructuring

Under pressure from stockholders for months to move decisively, Novell finally did just that by announcing a restructuring that will save $110 million, but will also result in laying off 600 employees and the likely spin off off its Celerant consulting subsidiary.

The changes were expected.

The firm said it will concentrate its business on its Linux and open source activities as well as on its identity and resource management operations. The company said also that the restructuring plan will result in a charge between $30-35 million in its fourth fiscal quarter that ended Monday.

"This cost restructuring initiative is part of the comprehensive transformation of Novell's business that the management team has been designing and implementing over the past year," said Novell's chairman and chief executive Jack Messman in a statement. "This is a decisive, yet disciplined, cost reduction action that balances the need to be fiscally prudent with the need to continually seek growth opportunities and generate long-term profitability in a highly competitive marketplace."

Some major investors had called for Messman's resignation, and while they didn't get that, they did get a new realignment of top management that has Ronald Hovespian being elevated from executive vice president to the dual posts of president and chief operating officer. Hovsepian was promoted earlier in the week.

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