Jobs blow hits Linuxcare as IPO put on hold
Last year's dancehall darlings become this month's wallflowers
A sudden downturn in fortunes at software and services outfit Linuxcare could mean as many as 25 per cent of its staff are to lose their jobs. The firm announced yesterday that redundancies were planned, but would not reveal the numbers involved and refused to be drawn on speculation that as up to one quarter of its employees were facing the chop. Other rumours suggest that Linuxcare is spending around $6 million per month and could be on the brink of running out of cash. This news is the latest in a series of blows to hit Linuxcare. On Monday it asked for its SEC filing to be withdrawn and its planned $56 million IPO is now well and truly on ice. Last month its chief executive, Fernand Sarrat, resigned - soon afterwards so did chief information officer Doug Nassuar. To lose one senior executive is unfortunate, but to lose two is careless. The company's venture capitalist backers, Kleiner Perkins Caufield & Byers, is said to be actively searching for someone to buy Linuxcare. The most likely candidates are thought to be Red Hat and VA Linux. Initial signs were very positive for Linuxcare. It received investment capital from - among others - Dell and Sun Microsystems, and Sarrat claimed he had received offers of as much as 300 million during the company's second round of financing. Last year Linux companies could do no wrong in the eyes of the market. Now Linuxcare is citing unfavourable market conditions - along with the departure of its CEO - as the reason for stalling its IPO. Now, who was it that said "don't believe the hype?"
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