June 27, 2001

VA Linux exiting hardware business, to focus on software

Author: JT Smith

It's on BusinessWire: VA Linux Systems, Inc.
(Nasdaq:LNUX - news) today outlined its new strategy focusing on application software, as well
as significant restructuring steps designed to immediately improve cash flow and reduce operating

As part of this strategy, VA Linux will exit the systems hardware business. Hardware orders will be
accepted until July 10, 2001, with the goal of completing all deliveries by the end of the fiscal year,
July 28, 2001. Staffing levels will be reduced by approximately 35% from the fiscal third quarter level
of 436 employees. The majority of layoffs will occur during the current fiscal quarter, with the
remainder over the next several months, as VA completes certain obligations to its customers,
primarily in the area of hardware service and support. (VA Linux owns NewsForge.)

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