Oracle begins cutting 5,000 jobs

Oracle will eliminate about 5,000 jobs following its US$10.3 billion acquisition of PeopleSoft, the company said Friday.

Oracle said it began notifying affected workers on Friday and most worker notifications of the layoffs will be completed in the next 10 days. The company expects its remaining workforce to stand at 50,000 employees. Before its acquisition by Oracle, PeopleSoft had about 11,000 employees.

Oracle said further information on its applications organization and product plans will be announced Tuesday at the launch event for its newly enlarged applications business. By buying PeopleSoft, Oracle removed from the market one of its top rivals in the business applications space.

Without going into detail on which areas were most affected by the cuts, Oracle said it retained 90 percent of PeopleSoft's product development and support staff. Development will continue on PeopleSoft's next upgrade, version 8.9, and on a 9.0 update to PeopleSoft's applications portfolio.

In making the cuts, Oracle has been careful to spare staff that is directly involved with customers and with PeopleSoft's code and the technology that came from its J.D. Edwards & Co. acquisition, said Joshua Greenbaum, a principal at Enterprise Applications Consulting.

"The impact for customers of PeopleSoft and J.D. Edwards is probably going to be minimal," he said. "Employees who have direct contact with customers or the code were asked to stick around."

The number of layoffs is not that enormous, particularly considering that there is a lot of overlap between Oracle and PeopleSoft when it comes to back-office departments such as human resources, finance and IT, Greenbaum said. "There is also a fair amount of middle management that you can get rid of," he said. Greenbaum expects a majority of the layoffs to be of former PeopleSoft employees.

It has been only a week since Oracle officially closed the PeopleSoft acquisition. More cuts may be ahead as the two companies become one, Greenbaum said. "Right now they are taking a first cut. It probably represents a majority of what is going to happen this year, but I would not be surprised if there are further layoffs," he said.

Oracle did not detail in which geographic locations it made the cuts. International cuts may be significant, especially in countries where both PeopleSoft and Oracle had offices, Greenbaum said.

Oracle did not return calls seeking further details of the layoffs.

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