Ouch! TurboLinux hit with layoffs

Is the sluggish tech market to blame for the burst of the open-source bubble?
Written by Mary Jo Foley, Senior Contributing Editor

One of the four major Linux distributors, TurboLinux, has laid off an undetermined number of its marketing, sales and development staff. TurboLinux confirmed the layoffs, first reported by the open-source enthusiast site Slashdot.

Citing TurboLinux's status as a private corporation, company officials declined to provide a count of the total number of employees let go.

But Lonn Johnston, the company's vice president of marketing, confirmed that sales and marketing were hit hardest, and development lost a total of two employees, worldwide. Johnston attributed the cuts to sluggish market conditions.

"You didn't need a plan where you could be profitable in 24 months not so long ago," said Johnston. But he argued that Linux companies are less affected by the change in the market than some of the consumer and business-to-business Internet firms. "The main reason we're doing (layoffs) is just market realities," said Johnston in the Slashdot article. "The market has changed.

"In the old days, not just Linux companies but lots of companies were going as quickly as possible to grab market share, build products, develop technologies, and do all kinds of stuff.

"The market said, 'That's cool, you can worry about profitability later.' You can certainly see in the last month, that that's no longer cool, and you need steps today that did involve some layoffs, and some expense cuts to get our bottom line expenses in line with our revenue and profit growth."

The news of TurboLinux's layoffs followed on the heels of some other not-so-good news for Linux companies.

Companies, ranging from Red Hat to VA Linux have seen their stock prices fall through the floor in the past month.

Corel a provider of its own Linux distribution and application software, has fallen on hard times in recent weeks, culminating in the resignation of a number of the Canadian software vendor's top executives.

Up-and-coming Linux services company LinuxCare was forced to scrap its IPO plans, leaving the company in disarray.

Johnston said the TurboLinux layoffs will require the company to "bring focus to what we do."

This means training its sights on clustering software and high-end network operating system work, he said, adding the company will also focus more heavily on the Asian market, where it has its largest installed base. Prior to Wednesday's layoffs, TurboLinux claimed to be "the world's fastest-growing Linux company."

In January, it received $57m (£38m) in investment backing from more than 20 computer companies, including BEA, Compaq, Dell, Intel, Fujitsu Support and Services, Legend, NEC, Novell, NTT, Oracle, SCO and Toshiba.

IBM and Oracle in recent weeks had struck major marketing deals with TurboLinux. Oracle, for its part, invested an undisclosed amount in TurboLinux, in exchange for Turbo's development of an Oracle-optimised Linux distribution.

So while shrinkage may be embarrassing to certain fictional television characters, Evan Leibovitch is not scared of it. In fact, he think's it is inevitable. The commercial Linux landscape a year from now will certainly be different from today's. Go to AnchorDesk UK for the news comment.

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