Novell shares fall after job cut rumors

NEW YORK: The shares of business network management software maker Novell

Inc. fell 8 per cent on Tuesday following reports the company could cut more

than 1,000 jobs.

The Provo, Utah-based company's stock was down a point to $11-3/16,

approaching its 52-week low of $7-7/8. Its 52-week high was 44-9/16.

During an August 16 conference call, the company said it would complete its

2001 budget in a few weeks and that a staff cut of more than 1,000 was possible,

according to a note by PaineWebber analyst Don Young. The company held the call

after it released a third-quarter financial statement that showed its profits

were about a fifth of what they were in the year-earlier period.

"We would welcome more aggressive moves on the cost front side but

maintain our belief that Novell's long-term valuation is dependent on better

visibility in the company's new line of Directory enabled products," Young

wrote in a research note.

Novell Spokesman Bruce Lowry said the company has seen estimates of potential

job cuts of up to 27 per cent since the August conference call.

"We don't comment on any of these things," Lowry said. "We

have said we're going to take steps. We do not have any formal proposal."

The company expects to announce its plan within a few days, Lowry added.

Novell, an employer of 5,500, recently reorganized itself into three business

units to streamline operations, yet has struggled because of falling sales to

big distributors and competition from Microsoft Corp.'s Windows 2000, as well as

the popularity of the Linux operating system.

(C) Reuters Limited 2000.