What is Canonicals' business model

Linux: Canonical fires employees

Canonical adapts its business model and fires employees. That is the background after yesterday's discontinuation of Unity and Ubuntu Touch. The measures became necessary when Canonical tried to bring in outside capital into the company.

After yesterday's clearing of Canonical's software inventory, the background to the decision to discontinue Unity, Ubuntu Touch and Mir is now visible. Like the UK tech website The Register reports, Canonical is laying off 30 to 60 percent of its employees by department.

Layoffs across the board

According to research by The RegAs the UK website is also known, the Unity team has been cut in half and the other half has been given other jobs in the company. Employees in other unprofitable departments have also been laid off. Exact numbers are unknown, but Canonical is believed to have an estimated 700 employees. Only the departments for support and consulting, which should be profitable in the foreseeable future, were excluded from the cuts.

"No part of the business had sacred cows" M. Shuttleworth

Industry dictation

The adjustments to the "Industry standards of revenue, costs, and profit margins“, As Shuttleworth calls the cuts, became necessary because Canonical, which has been privately financed by Shuttleworth since it was founded in 2004, wanted to bring money into the company from the capital market. Funders commonly do profitability calculations before investing in a company and find Canonical, which should not surprise anyone, that it is generally unprofitable.

No IPO planned

This does not apply to the cloud, container and security areas. Here Canonical, according to Shuttleworth, generates tens of millions in sales and can show growth rates of 10 percent and more. Employees from unprofitable divisions such as Unity / Mir and Ubuntu Touch are transferred to these areas. Shuttleworth denied that these measures were in connection with an IPO that had already been considered earlier. Canonical only wants to be prepared for investments from outside. The next publications will show what these cuts mean for Canonical's operating system.

  • Ferdinand Thommes email
    ... is a freelance author, city guide and Linux developer and currently lives in Berlin and Charleston, SC.