Novell is reducing its headcount by 19 per cent - 1,400 employees - to cope with falling software sales.

The cuts will save Novell $200 million annually by the second half of fiscal 2002. The software vendor expects to take a $55 million pre-tax restructuring charge to implement its redundancy programme, which will result in the reduction of its workforce to around 6,000.

Novell blamea the cuts on the overall decline in the IT market, the oversupply of IT consulting services capabilities, and low expectations of a quick recovery next year.

Based on preliminary financial data, Novell expects Q4 revenues of around $306 million (in line with previous estimates) when it reports its quarterly results on November 29.

In July, Novell acquired Cambridge Technology Partners to boost services capability; the announcement of job cuts comes days after Jack Messman, the former head of CTP, became Novell chairman. He was appointed chief executive of Novell in July. ®

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Novell Announces Restructuring and Workforce Reductions