Novell last week confirmed it is to lay off up to 40 UK staff, after posting a higher than expected second quarter loss.
Novell, which employs around 250 staff in the UK, posted a loss of $14.6 million (#9.1 million) for the quarter ended 30 April 1997. The company blamed the destocking of inventory in the channel, which it decided to do over fewer quarters than was necessary.
"We could have made a profit if we'd wanted to, but decided it was more important in the long term to get our inventory to the right level," claimed Tom Schuster, managing director of Novell UK and Ireland. "It was a deliberate act of good judgement."
He added that although the firm had made a loss for the quarter, he expects strong profits over the fiscal year as a whole. Revenues for the quarter were up to $273.1 million, compared to $188.2 million for the same period last year. Novell is also expecting to make a loss next quarter, because of inventory disposals and charges associated with the layoffs.
Although the loss was bigger than predicted, the company's share price rose when news of the job cuts hit the stockmarket.
Schuster said the job cuts were necessary as part of a restructuring of Novell's business model, and a response to the demands of a changing market. Worldwide, the company is cutting 18% of its staff. Across Europe, 140 staff are expected to lose their jobs, rather than 50 as previously stated by US officials.
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