SCO Confirms Minor Layoffs

The company says the small number of layoffs across the board had nothing to do with backer BayStar's demands that the company focus all of its energy on its Unix litigation.

Rumors that The SCO Group Inc. laid off some workers last week turned out to be true. According to Blake Stowell, communications director at SCO, the embattled Unix company laid off "a minor numbers of employees across the board."

Stowell said the Lindon, Utah, company made the layoffs so it "could be profitable within our core Unix business in the next quarter." The cuts were companywide and were not confined, as rumor has had it, to just the engineering staff. In addition, the company made no changes to its management.

In the week before the layoffs, SCO hired Bert Young as the companys new chief financial officer (CFO). Former CFO Bob Bench is acting as vice president of corporate development until he retires later this year.

Some observers had thought SCO was cutting its engineering staff in response to financial backer BayStar Capital LLCs demands that SCO stop working on Unix and other matters to focus its full attention on its Linux litigation with IBM.

/zimages/5/28571.gifClick here to read about BayStars attempt to redeem its 20,000 shares of SCOs series A-1 convertible preferred stock.

"We believe SCO must focus its resources," BayStar spokesman Bob McGrath said several weeks ago. He said BayStar had reached "the conclusion that SCO should focus its resources on its most valuable asset: its intellectual property claims."

"SCO should not be spending resources, its time and money, on its other businesses, such as OpenServer and UnixWare," McGrath added. "The return there, both now or in the future, will not give enough value for return to stockholders and investors."

When called about the layoffs, McGrath said it was the first BayStar had heard of them. He said BayStar maintains its position on the changes SCO must make for BayStar to keep its investment in the company.

Stowell reiterated that SCO is continuing to work on its software offerings. "We have lots of product rollouts coming up with new releases of UnixWare, OpenServer, SCOoffice Mail and WebFace, the companys Web services development platform."

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