Scaldera swings the axe

20 per cent of SCO lost en route to Utah.

By Andrew Orlowski in San Francisco, 8th September 2000

Customer Success Testimonial: Recovery is Everything

The Santa Cruz Operation is to shed 19 per cent of its workforce - 190 employees - as it gets ready to hand its Unix operations over to Caldera.

The deep cuts affect all operations of the business across the globe said a spokesman for SCO. However, the Tarantella business unit of SCO escapes the axe. SCO Inc. will become Tarantella Inc. once the merger is approved, and Caldera acquires the Unix software and professional services core of the old SCO.

SCO CEO Doug Michels said in a prepared statement that SCO's poor financial performance this year, along with overlap with Caldera, were to blame for the redundancies: "This reduction will lower expenses to better reflect SCO's recent performance in our server software and professional services divisions. Moreover, we have worked closely with Caldera to ensure that these actions produce staffing results consistent with its future, post-acquisition business model."

SCO executives have put the blame on not having a refresh to its core OpenServer Unix, once the Y2k freeze was lifted, for a precipitous drop in income this year.

Ironically SCO's business, despite its recent poor performance, has nevertheless performed far better than Caldera's. In the past quarter, Caldera lost over $7 million on $1 million revenue. But Caldera is a "new economy" Linux company, and SCO isn't. ®