Novell To Concentrate in the Linux and Open Source Growth Opportunities

Novell, Inc. (www.novell.com) announced it will concentrate its business on key growth opportunities in the Linux and Open Source and Identity and Resource Management markets, resulting in a restructuring of the business that will reduce annual run rate expenses by more than $110 million.

The full effect of the cost reductions is expected to be realized in the first fiscal quarter ending Jan. 31, 2006. When completed in the first fiscal quarter 2006, the cost restructuring is expected to result in a total headcount reduction of approximately 600 positions, more than 10% of Novell’s worldwide workforce.

Jack Messman, Novell’s chairman and chief executive officer, said, "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. While it is a difficult decision to eliminate positions in our talented and dedicated workforce, this move is necessary to ensure that our costs are more closely aligned with our business strategy."

As a result of the restructuring, product development and consulting resources are now more focused on the company's growth businesses, Linux and Identity. Novell also expects to continue to evaluate non-core consulting activities.

"The key driver in this cost reduction is to focus more of our resources on our growth areas," said Joseph S. Tibbetts, Jr., senior vice president and chief financial officer.

Highlighting the company’s increased focus on its core businesses, Novell also announced today that its Board of Directors has authorized management and its financial advisor, Citigroup Corporate and Investment Banking, to explore strategic alternatives for Celerant, Novell's consulting subsidiary.