Novell Announces Restructuring and Workforce Reductions

Novell, Inc. (NASDAQ:NOVL) a leader in eBusiness solutions and Net services software, today summarized details of restructuring actions to restore profitability in the face of poor market conditions, and to implement Novell's plans for a new solutions focus through rapid consolidation of Cambridge Technology Partners. The company is reducing its total workforce by 19 percent, or approximately 1,400 positions. After the reduction, the number of employees worldwide will total approximately 6,000. The company is also writing off certain other assets, and anticipates a pre-tax restructuring charge of approximately $55 million, most of which will be taken in its fourth fiscal quarter that ended Oct. 31, 2001.

The restructuring actions are central to the new solutions focus that Novell is implementing through its acquisition of Cambridge Technology Partners in July 2001. As planned, and announced earlier, the Novell restructuring is intended to align the combined organizations and redesign business processes. Novell is also responding to the overall decline in the IT market, the oversupply of IT consulting services capabilities, and expectations that the IT market will be slow to recover in 2002. Overall, the company has identified greater savings from its business infrastructure and operations than originally anticipated. It has also been able to implement restructuring faster than originally planned. The Novell restructuring will be completed in the second quarter of fiscal 2002.

Novell also reported, based on preliminary financial data, that it expects fourth fiscal quarter revenue of $306 million. Earnings per share is expected to be approximately $0.01 per share, on a diluted basis, before non-recurring restructuring, integration and impaired investment charges. Combined, these non-recurring charges in the company's fourth fiscal quarter are estimated to total over $90 million. Novell will release its complete fourth quarter results on Nov. 29.

"In spite of a very difficult market environment, Novell's fourth quarter was largely in line with the expectations we discussed during our third quarter conference call," said Novell Chairman and Chief Executive Officer Jack Messman. "And, it's gratifying that our results included noteworthy one Net solution adoptions from a number of leading customers worldwide."

"Novell is becoming a more aggressive company, adopting solution delivery and support capabilities across every aspect of our business," continued Messman. "The actions we are announcing today mean a better structured company, with improved profitability, that's well equipped to make real progress toward our growth objectives."

Novell will achieve significant savings and improve its profitability through these actions. By the second half of fiscal 2002, Novell expects to realize the full benefit of savings from the actions, estimated at approximately $200 million annually.

Messman added, "Now is the time to make these changes as we enter our new fiscal year. Novell's Net services product strategy and our one Net vision to support eBusiness solutions are both solid, and aimed directly at what customers want: solutions to their business problems featuring best-of-breed IT products, like Novell's Net services software. Novell has tremendous market opportunity."

"Our plan is to take Novell's Net services software market lead and use it to build broad market adoption of one Net solutions," continued Messman. "Novell's products are squarely in the middle of converging market needs for security, identity management, application integration and innovative Net services across network solutions. And, unlike our competitors, our products are shipping today. On the strength of our products and solutions, and the ability to deliver today, Novell has the basis for lasting market leadership in eBusiness solutions."

Novell has scheduled the release of its complete fourth quarter financial results for 4 p.m. EST Thurs., Nov. 29. A live Web cast of a Novell conference call with financial analysts to discuss fourth fiscal quarter results will be broadcast at 5 p.m. EST Nov. 29, on the Quarterly Results page at Novell's Investor Relations Web page: http://www.novell.com/company/ir/qresults/. An audio replay of the call will be available on the same Quarterly Results Web page through midnight, Dec. 6.

Forward Looking Statements
This press release contains forward-looking statements that involve a number of risks and uncertainties, as well as assumptions about changes in Novell's staffing, organization and business processes, changing markets and market conditions, market opportunities, marketing efforts, near and long-term objectives, potential new business strategies, new solutions focus, new methods of distribution, Net services, anticipated demand for new offerings from markets that Novell is entering, future business performance and outlook. These forward-looking statements are neither promises nor guarantees and involve a number of risks and uncertainties that could cause actual results to differ materially. The risks and uncertainties include, but are not limited to, the following: business conditions and the general economy; changes in distribution choices and channel partners; competitive factors; sales and marketing execution; shifts in technologies or market demand, the successful integration of Novell and Cambridge Technology Partners and other risks: identified in the company's SEC filings, including information under the heading "forward looking statements" its Form 10-K for the fiscal year 2000 and in the Form S-4 registration statement filed in connection with the merger with Cambridge Technology Partners.

About Novell
Novell, Inc. (NASDAQ: NOVL), is a leader in eBusiness solutions and Net services software designed to secure and power the networked world. Novell and its eServices division, Cambridge Technology Partners, help organizations solve complex business challenges, simplify their systems and processes, and capture new opportunities with one Net solutions. Novell provides worldwide channel, consulting, education and developer programs to support its offerings.

For information on Novell's complete range of products and services, contact Novell's Customer Response Center at (888) 321-4CRC (4272), or visit Novell's Web site at http://www.novell.com. Information on eBusiness and integration solutions from Cambridge Technology Partners can be accessed at http://www.ctp.com. Press may access Novell announcements and company information on the World Wide Web at http://www.novell.com/pressroom.

Novell is a registered trademark of Novell, Inc. in the United States and other countries. Cambridge Technology Partners is a registered trademark of Cambridge Technology Partners, Inc. All third-party trademarks are the property of their respective owners.