Feeds

Corel staffers face up to prospect of 500 job cuts

C$15-30m cash injection may not be enough

  • alert
  • submit to reddit

Build a business case: developing custom apps

Corel appears to be rapidly imploding, despite the C$15-30 million cash injection it successfully negotiated last week.

According to a Reuters report, the morale of employees is poor, for all CEO Michael Cowpland's claims that the mood among staff is "good".

Information from insiders suggests Corel has a C$40 million cost-cutting target, and that's inherently going to mean job losses - potentially more than 500 of them, a big chunk out of Corel's 1500-strong payroll.

No wonder, in the words of one ex-staffer cited by Reuters, there's "a lot of resumes floating around". Certainly, Corel's executive VP for corporate services, along with its VP and general counsel, have both just quit. And it's hard not to imagine others scouting around for new jobs while there's so much uncertainty hanging over the company.

Corel has even, according to Reuters, cancelled all company credit cards. It's a very bad sign when a company is worrying about what is, for a company of Corel's size, effectively small change. Oh dear...

But let's assume for a moment that Cowpland's boast that "once we're through this kind of little cloudy stage, we'll be looking real good", is an un-spun appraisal of the company's situation. With the Inprise/Borland merger off, Corel is desperate for Linux to take off in the mainstream, attracting the kind of consumers and small business customers who buy its productivity and graphics software.

Six months ago, the company was winning sales of $71.3 million, since then its sales have fallen 38 per cent to $44.1 million, and there's no real sign of a turnaround. Clearly sales of its Windows products are tailing off, possibly because Windows users are assuming Corel's focus on Linux shows a lack of interest in maintaining the Windows apps. That's not entirely true, since the Linux versions of CorelDRAW, WordPerfect, etc. are just the Windows apps modified to run through the company's WINE Windows-on-Linux emulator. But the perception could damage Corel's sales further.

Without Linux sales to balance that shortfall, Corel is going to run into major problems fairly quickly. The $99 WordPerfect Office, for instance, is up against free-of-charge alternatives, which are likely to prove more attractive to Linux's prime constituency of techie users (ie. folks not too interested in personal productivity apps) used to getting software for nothing.

Linux remains largely untested as a commercial software platform, and companies in far better health than Corel have paused for thought before porting top-dollar apps over to the open source OS. Corel, of course, has no option - it has to try. How long it can afford to keep at it is another matter. ®

Related Stories

Corel, Inprise/Borland call off merger
Inprise to investigate 'fairness' of Corel takeover

Boost IT visibility and business value

More from The Register

next story
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Microsoft exits climate denier lobby group
ALEC will have to do without Redmond, it seems
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.