October 25, 2006

Xandros layoffs? Just staffing 'adjustments'

Author: Lisa Hoover

Xandros, a distributor of Linux desktop and server operating systems, caught at least five of its employees by surprise last week by suddenly terminating their employment without warning. While CEO Andreas Typaldos says the move is simply an "in-flight adjustment," at least one former employee questions that statement.

Xenia von Wedel Rosen, a public relations representative for Xandros, was quoted as saying that five employees of the company's marketing department had been terminated recently as part of a reorganization process. Typaldos tells NewsForge, however, that among the employees let go were two Web site developers, an event coordinator, one member of the channel development department, and a recently hired member of the sales support staff.

Typaldos is quick to point out that the recent terminations are simply a restructuring of the company in keeping with its ongoing growth strategy. "We have grown our company by 50% over the last year and we just closed the second $5.5 million of an $11 million raise. When you grow this fast and hire lots of new people in lots of areas, it's only natural to sometimes have to stop, catch your breath, and make in-flight adjustments -- especially in a company like Xandros that had three years of unstopped growth."

According to Typaldos, Xandros recently hired an additional eight new employees: a full-time CFO and vice president of administration, a vice president of OEM channels, a vice president of sales, and five people to fill various roles within the sales department. "We recently terminated a total of five employees, but also hired eight new and mostly senior people. So we don't believe that we've had a layoff. The net of these personnel activities is a net increase, not a decrease. We expect even more growth, primarily in sales and product support areas."

At least two of the positions Typaldos says the company filled date back at least several weeks. According to a company press release, senior vice president of sales Jeff Kuligowski was hired in mid-September. Spencer Hayman is said to be taking the reins as the new CFO this month. Sources close to Xandros say both men have been working at the company since at least August of this year.

Caught off guard

Charles Hargrove was hired by Xandros earlier this year to work in the New York City office as a sales engineer. During his interview, he was told the company's outlook was strong and it planned to invest a lot of time and energy in developing its server market. "The picture painted to me was that by the end of the year, I would have other sales engineers under me and that they would he expanding the department."

Hargrove was stunned to hear that he was among those to be terminated last week. "We were called into a conference room, they shut door and said, 'We decided to let you all go. The company is taking a new direction and your jobs have been eliminated. Clean out your desk now. You will be paid to end of month.'

"I was out the door at 11:30."

Hargrove says he had recently begun to wonder if there was something going on behind the scenes. After asking his supervisors several times the status of some computer equipment he had ordered in August and being told it was "on its way," Hargrove was surprised to learn recently it had not even been ordered. Then his health insurance benefits, which were supposed to have kicked in after 30 days of employment, never materialized.

"About three weeks ago I started to see strange faces pop up in the conference room, and they turned out to be investors. Then one weekend, someone had cleaned out a [seldom-used] room and given it to an investor as an office. A week later we were canned."

During his employment with Xandros, Hargrove received no complaints about his job performance and, in fact, was assured that the termination was not a reflection of his talent as a sales engineer. "They told us all in the conference room that 'none of this has to do with your performance and we will give you a recommendations to help you in your job search.'"

Company representatives then passed around boilerplate documents for each employee to sign, promising that they would not sue Xandros.

Hargrove says while he wasn't expecting to be searching for a job so soon after accepting a position at Xandros, he is confident he will find employment soon. He has more than 20 years experience in Windows and Linux-based computing, managerial experience, and oversaw the entire amateur radio operation in New York City following the 2001 terror attacks. He bears no ill will toward the company and calls its Ottawa-based development and technical support teams "a dedicated bunch."

As for Xandros' product line, Hargrove says he likes it so much he recently installed it on a relative's machine, though he acknowledges it still has some kinks that need to be worked out. "I like the software and I like the concept," he says. "But I said to myself the week before I lost my job, maybe it's not quite ready for prime time."

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