Oracle to layoff more than 10,000 Sun staff: analysts

Stan Beer
Tuesday, 21 April 2009 06:33

Business IT - Technology

The US$7.4 billion acquisition of Sun Microsystems by Oracle Corp will result in layoffs of between 10,000 and 15,000 staff in the first two years, according to industry analysts. In so doing Oracle will accomplish what Sun didn't have the stomach for and save billions of dollars each year they say.

Referring to Oracle as the great white shark of the IT industry, analysts Stuart Williams and Josh Farina at New Hampshire based TBR say Oracle saw an opportunity to drive the operational efficiencies Sun never had the courage to enact.

"In our estimation, Oracle will lay off between 10,000 to 15,000 Sun employees and gain annual savings of $1.5 billion in operating expense in year one and more than $2.0 billion in the second year," they say in a research note.

The resulting organisation will be one of a new breed of vertically integrated systems vendors that will be well positioned in the market and a threat to the hardware vendors they say.

TBR believes Oracle may spin off or sell off some parts of Sun’s hardware and software business following the acquisition.

According to TBR, likely purchasers of Sun’s hardware business include Fujitsu, EMC, Dell and HP – any of which may benefit from adding Sun offerings to their portfolio.

On the software side, TBR believes Oracle will retain the Java, Solaris and MySQL businesses: Java and Solaris provide core technologies that Oracle either uses or could leverage to grow its footprint among enterprises; meanwhile, control over MySQL allows Oracle access to smaller businesses, provides an open-source alternative to cost-conscious buyers, and keeps a database contender out of another vendor’s hands.

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