Rewdog
10-19-2001, 11:09 AM
From 110 to 20 employees, people are questioning whether they are going to make it to the end of the year....
Got this in an email:
Sources say Linux systems vendor Penguin Computing, the one-time VA
Linux Systems wannabe, is in tenuous circumstances after annihilating
its top management and instituting a big round of layoffs.
Except for the company's founder Sam Ockman, its chairman and CTO, the
entire senior management team has reportedly either been fired or walked
out.
The management section on Penguin's web site was erased today. Up until
yesterday, it listed nine executives including Ockman.
Penguin CEO Martin Seyer, who joined in January, has reportedly been
fired. He came from NCR, where he was VP of the High Availability
eCommerce Division. Penguin's VP of sales and marketing Scott Weinbrandt
and HR chief Michael Gornet were also reportedly fired. Seyer and
Weinbrandt, both server folk, had a history with both NCR and Dell.
Apparently, VP of operations Kathy Chou and VP of product marketing
Patrick Patla walked out.
The departure of Seyer and Weinbrandt are believed to put major deals in
jeopardy.
Penguin is also believed to have had another round of layoffs this week
leaving it with about 20 people. Reportedly there was no severance
offered.
Penguin terminated roughly 23% of its staff in August. Sources say it
had 110 employees on August 9 before the reduction hit.
The San Francisco operation was set up in May 1998 to provide
built-to-order Linux servers, workstations, networking products and
professional services. It also offered clustering, VPN and hosting, some
through partnerships.
It claims to have been the first concern to develop and manufacture
computers running the Linux operating system exclusively.
Sources hint of a power struggle between Ockman and the senior managers
who were brought it to turn the stumbling company around. Apparently,
Ockman, the majority equity holder, had a hard time restraining himself
from involvement in the day-to-day operations, creating a point of
friction.
Ockman reportedly attributed the layoffs internally to Penguin's need to
become profitable. He is not believed to have explained the alleged
firings except to say that he was back in control.
Ockman did not return several calls seeking comment. The other managers
could not be reached.
Penguin watchers claim the company made three crucial mistakes: It
failed to get sufficient funding. It had a weak board. And Ockman was
allowed to meddle.
Penguin reportedly got an investment from Bull a year ago along with a
memorandum of understanding for Bull to sell some Penguin boxes in
Europe. It was never clear whether Bull acted on the MOU.
Last fall Penguin got about $12 million in a Series B round apparently
led by DragonVenture. It is unclear whether Bull was involved. At the
end of this summer, Penguin was reported to be in the midst of a C round
to build out its infrastructure. It was expected to take several more
months to close. Weinbrandt at the time bragged that "We have no
problems in sustaining ourselves for an infinite amount of time."
Back around then, Penguin claimed to be on target in terms of revenue
goals and the bottom line. It fancied itself a tier-one Linux vendor
competing against IBM, Dell, Compaq and HP, whose pricing and reach were
partially responsible for VA's failure as a hardware company.
Penguin could never be drawn into explaining how it would avoid the VA
curse and studiously avoided all our phone calls since bringing in its
now-scattered management team.
Ockman, by the way, came from VA Linux, where he was a software
director, and left to create the knockoff.
VA at least has the remains of its sizeable IPO purse to live off as a
restyled software house. It's not clear how much money privately held
Penguin has in the bank. Former execs think it has some resources left
but expect that debts could force Ockman into bankruptcy. It remains to
be seen if Penguin can make it through the end of the year
Got this in an email:
Sources say Linux systems vendor Penguin Computing, the one-time VA
Linux Systems wannabe, is in tenuous circumstances after annihilating
its top management and instituting a big round of layoffs.
Except for the company's founder Sam Ockman, its chairman and CTO, the
entire senior management team has reportedly either been fired or walked
out.
The management section on Penguin's web site was erased today. Up until
yesterday, it listed nine executives including Ockman.
Penguin CEO Martin Seyer, who joined in January, has reportedly been
fired. He came from NCR, where he was VP of the High Availability
eCommerce Division. Penguin's VP of sales and marketing Scott Weinbrandt
and HR chief Michael Gornet were also reportedly fired. Seyer and
Weinbrandt, both server folk, had a history with both NCR and Dell.
Apparently, VP of operations Kathy Chou and VP of product marketing
Patrick Patla walked out.
The departure of Seyer and Weinbrandt are believed to put major deals in
jeopardy.
Penguin is also believed to have had another round of layoffs this week
leaving it with about 20 people. Reportedly there was no severance
offered.
Penguin terminated roughly 23% of its staff in August. Sources say it
had 110 employees on August 9 before the reduction hit.
The San Francisco operation was set up in May 1998 to provide
built-to-order Linux servers, workstations, networking products and
professional services. It also offered clustering, VPN and hosting, some
through partnerships.
It claims to have been the first concern to develop and manufacture
computers running the Linux operating system exclusively.
Sources hint of a power struggle between Ockman and the senior managers
who were brought it to turn the stumbling company around. Apparently,
Ockman, the majority equity holder, had a hard time restraining himself
from involvement in the day-to-day operations, creating a point of
friction.
Ockman reportedly attributed the layoffs internally to Penguin's need to
become profitable. He is not believed to have explained the alleged
firings except to say that he was back in control.
Ockman did not return several calls seeking comment. The other managers
could not be reached.
Penguin watchers claim the company made three crucial mistakes: It
failed to get sufficient funding. It had a weak board. And Ockman was
allowed to meddle.
Penguin reportedly got an investment from Bull a year ago along with a
memorandum of understanding for Bull to sell some Penguin boxes in
Europe. It was never clear whether Bull acted on the MOU.
Last fall Penguin got about $12 million in a Series B round apparently
led by DragonVenture. It is unclear whether Bull was involved. At the
end of this summer, Penguin was reported to be in the midst of a C round
to build out its infrastructure. It was expected to take several more
months to close. Weinbrandt at the time bragged that "We have no
problems in sustaining ourselves for an infinite amount of time."
Back around then, Penguin claimed to be on target in terms of revenue
goals and the bottom line. It fancied itself a tier-one Linux vendor
competing against IBM, Dell, Compaq and HP, whose pricing and reach were
partially responsible for VA's failure as a hardware company.
Penguin could never be drawn into explaining how it would avoid the VA
curse and studiously avoided all our phone calls since bringing in its
now-scattered management team.
Ockman, by the way, came from VA Linux, where he was a software
director, and left to create the knockoff.
VA at least has the remains of its sizeable IPO purse to live off as a
restyled software house. It's not clear how much money privately held
Penguin has in the bank. Former execs think it has some resources left
but expect that debts could force Ockman into bankruptcy. It remains to
be seen if Penguin can make it through the end of the year