October 19, 2001

Ockman: Staff cuts make Penguin Computing profitable

Author: JT Smith

- By Grant Gross -
Penguin Computing founder Sam Ockman has retaken the reins as the Linux hardware and services company's CEO, and has cut about a third of the staff in a reorganization he says has moved the company onto the profitable side of the ledger.

Ockman, speaking to NewsForge late Thursday, said CEO Martin Seyer, who'd been with the company about 10 months, was let go, as were the company's vice presidents for operations and engineering. Ockman, who was the company's chairman and CTO, has moved back into the CEO position he occupied for two years after founding Penguin Computing, and some of the executive layoffs happened because he wanted to replace Seyer's team with his own, he said.

"It's just like any executive, you have your own team of people you've worked with before," said Ockman. Reports of several executives walking out after Seyer was fired are untrue, he said, although one person resigned.

The company, which creates customized configurations and customized Linux appliances in addition to selling traditional Linux hardware, now has about 40 employees, including consultants; according to Ockman it had about 60 before the layoffs. Some of the marketing, sales, I.T., and software development teams were part of the cuts.

"The board decided we needed to adjust to the new economy, and I was the best person to do that," Ockman said. "We were more fortunate than most, in that we were leaders in the space. When VA [Linux] exited the space, we became the number one Linux systems company in the world."

Ockman, a veteran Open Source advocate, said the cuts were needed to insure profitability: "It's a shame, but it's what has to be done. The number one thing is to continue the company for our customers and be profitable every month. We're a profitable company with this restructuring.

"The whole computing industry is going through this," he added. "For us to be immune to this would be crazy. We remain a very healthy company. We're not immune to the economy, but I think our leadership position and the type of services we offer really puts us in a unique spot."

Customers shouldn't see much difference in the company, said Ockman, because the technical support and customer service teams weren't affected by the cuts.

Look for Penguin Computing to come out with clustering server products shortly. Ockman said Beowolf clustering will be a growing focus within Penguin Computing. The company also plans to release 64-bit products "when 64-bit is ready for prime time."


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