Just before selling its server software and services divisions to Caldera Systems, SCO lays off 190 workers and reports a one-time charge of up to US$6 million.
The Santa Cruz Operation said Thursday it plans to slash 19 percent of its workforce -- 190 jobs -- prior to turning over a pair of divisions to Caldera Systems.
"These cuts are unrelated to the merger," said a Caldera Systems spokesman adding, "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 US$5 million and US$6 million 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 US$120 million 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.
