SCO slashes its work force by 19 percent

The Santa Cruz Operation said Thursday it plans to slash 19 percent of its work force -- 190 jobs -- prior to turning over a pair of divisions to Caldera Systems.
Written by Mary Jo Foley, Senior Contributing Editor

"These cuts are unrelated to the merger," said a Caldera Systems spokesman, who added, "Given where SCO was financially prior to the merger, these cuts were necessary."

Caldera Systems CEO Ransom Love said that the bulk of the cuts would come from the SCO side, but that a few Caldera people would be cut, as well. "This is clearly a SCO layoff, not a Caldera layoff," Love said. "We are simply positioning the (combined) company to be profitable before any other Linux company is."

Love added that the cuts would be made across the board and would eliminate redundant sales, marketing and technical positions.

SCO said it would report a one-time charge ranging between $5m and $6m for the fiscal fourth quarter ending Sept. 30, to pay for the job cuts. The moves come ahead of the planned sale of SCO's services and server software units to Caldera.

"This reduction will lower expenses to better reflect SCO's recent performance in our server software and professional services divisions," said Doug Michels, CEO of SCO. "Moreover, we have worked closely with Caldera to ensure that these actions produce staffing results consistent with its future, post-acquisition business model."

As first reported by Sm@rt Partner, the $120m stock and cash deal sends the SCO Server Software and Professional Services Division to Caldera. The acquisition, announced in August, is expected to close later this year.

Following the sale, SCO will consist solely of its Tarantella division, whose technology provides Internet capability for applications. The slimmed-down company will adopt the Tarantella name.

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