Oracle expected to lay off thousands

As Oracle digests its PeopleSoft purchase and prepares to officially launch its combined operations next week, the company is in the process of a mass layoff expected to cut thousands of jobs.

An Oracle spokesman said the company will announce the size of the new organization on Friday. Oracle Chief Executive Officer Larry Ellison sent an e-mail to PeopleSoft employees last month, soon after the US$10.3 billion acquisition deal was announced, warning them of forthcoming cuts.

Analysts expect the cuts to go deep: Piper Jaffray & Co.'s Tad Piper said in a research note that he expects Oracle to cut at least 4,500 jobs now, and ultimately up to 6,000. Including the 11,700 employees from PeopleSoft, Oracle's total headcount is around 54,500.

Layoffs inevitably follow big mergers. PeopleSoft cut 1,000 positions following its 2003 acquisition of J.D. Edwards & Co., and Hewlett-Packard shed more than 17,000 jobs after swallowing Compaq Computer. Oracle has not commented on which departments will bear the brunt of its cuts.

The company is also preparing to announce broad organizational changes. Applications head Ron Wohl is expected to be replaced, as Oracle works to define a strategy for both its PeopleSoft and Oracle products. In his e-mail to PeopleSoft employees, Ellison said Oracle expects to retain distinct development and support organizations for PeopleSoft's Enterprise, EnterpriseOne (formerly J.D. Edwards) and World software lines.

Further details will be available Tuesday at the company's first post-merger customer event, executives said.

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