The Santa Cruz Operation (SCO) has consolidated its research and development units into one department and laid off 120 staff, the equivalent of 10 per cent of its workforce.
The Unix software supplier also plans to write off old stock and discontinued product lines still sitting in the channel in a move that will cost it a total of $8 million against its third quarter figures.
The reduction in channel inventory is expected to have a negative short term impact on revenues, but is intended to smooth the path for SCO to distribute licences to its resellers over the Internet rather than physically transporting packages, including licences and manuals, to them.
David Taylor, SCO?s European marketing director, said: ?We?ve been looking at our whole infrastructure and decided to reorganise our product development. The Unix and IXI businesses used to be separate divisions with their own marketing, quality assurance and testing, but we decided to take some of the cost out by rationalising the duplication of responsibilities. We?ve been re-evaluating our product development roadmap and will focus on our Unix server and Tarantella products for managing diverse clients, but no product lines will be axed.?
He refuted some analysts' comments that the cost cutting exercise was an attempt to make SCO more competitive under increasing pressure from Microsoft with its rival Windows NT offering.
The company expects to cut $3.5 million out of its operating costs as a result of the move, which affects 20 staff in Europe.
At the same time, SCO announced that its directors had authorised the repurchase of up to two million shares, in addition to the five per cent of stock it said it would repurchase last August.
The firm?s stock has been languishing at around the $4 mark since early April, about half the value it was six months ago. Taylor said the reorganisation was designed to shore up the share price by demonstrating SCO?s new and improved focus on its core product lines.
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