Oracle to sack 5000 staff

Stan Beer
Monday, 17 January 2005 19:30

IT Industry - Development

After acquiring PeopleSoft, Oracle has begun to send pick slips to some of the 11,700 employees working at its former rival, and announcing that 5,000 employees, or nearly 10 percent of the combined Oracle-PeopleSoft work force, will be sacked. It is not yet known how many jobs will go in Australia.

The New York Times reports (15 Jan) that Oracle did not give a breakdown of how many of the 5,000 employees to lose their jobs worked for the former PeopleSoft and how many for Oracle.

Oracle formally completed its $US10.3 billion acquisition of PeopleSoft on 7 January. The paper says that for years, Oracle, the undisputed leader in the corporate database market, had been struggling to gain a larger presence in the multibillion-dollar industry of back-office software that companies use to manage their finances, inventory and procurement needs, whereas in that market, PeopleSoft was the uncontested No. 2, behind SAP of Germany, the business software giant.

Oracle had also promised that the company would release at least one more major upgrade of PeopleSoft's flagship software product, and provide customers technical support for at least 10 more years.

However, the NYT says that some market watchers are not so sure, concer ned about how, with such a large a reduction in the work force, the company is going to be able to continue to deliver the same level of service to PeopleSoft's customers.

In another story commenting on the Oracle sackings, The Mercury News reporets (15 Jan) that the Oracle staff cuts will bring total employment to about 50,000 worldwide, although Oracle will keep the vast majority of the technical workforce of its smaller rival.The Mercury says the mass firings of 5,000 could save the company about $US1 billion a year.

The paper reports that Oracle has said company that this week it will unveil its strategic game plan for the combined business during a meeting with customers that will be accessible via Webcast.

Oracle, whose core business is database software, hopes the acquisition will beef up sales of its applications software, which manages business functions such as finances and personnel. Analysts have been divided on the deal, with some saying Oracle paid too much and others seeing it as a stroke of strategic genius that will depend on quick and smooth integration.