Oracle Announces 5,000 Job Cuts

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UPDATED: A chapter in PeopleSoft’s history is closing as Oracle moves forward with its takeover and layoff plans. Workers expect pink slips tucked in FedEx boxes to arrive on their doorsteps this weekend.

Some 5,000 Oracle employees (including former PeopleSoft employees) will be let go, according to a company official. Some received notices today, but it could take 10 days until all workers know their fates.

The cuts reduce the combined companies’ worldwide staff to 50,000, Oracle
said. The layoffs come one week after the conclusion of Oracle’s 18-month pursuit of PeopleSoft.

Oracle plans to keep more than 90 percent of PeopleSoft product development and product support staff. The PeopleSoft development team will finish the development and deployment of PeopleSoft version 8.9, then begin the next upgrade to PeopleSoft products, version 9.0.

“By retaining the vast majority of PeopleSoft technical staff, Oracle will have the resources to deliver on the development and support commitments we have made to PeopleSoft customers over the last 18 months,” Oracle CEO Larry Ellison said in a statement.

Oracle will further outline its organizational chart, product plans, and other market strategies at the company’s Redwood Shores, Calif.-based offices on Tuesday.

Boyd Mark, director of global marketing systems at PeopleSoft, said he doesn’t expect to come to work on Monday. As one of the key members of the transition team during PeopleSoft’s acquisition of JD Edwards, he told internetnews.com that Oracle is botching the PeopleSoft changeover.

“In my opinion, this is classic Samurai Larry,” Mark said about Oracle’s CEO. “Not only does he cut the head off his enemy, he burns their village down to the ground as well. PeopleSoft took 90 days to complete the JD Edwards transition. Oracle is doing theirs in two weeks. They could go a little slower. Nobody seems to know what is going on. Oracle is really putting themselves in a bad position by firing the people who know how things are run around here.”

The Monday after the merger closed, Mark said executives breezed in, announced a two-week review, and whisked out. No official communication has come from Oracle since. Mark said he and his employees heard about the pink slips only through word-of-mouth.

Internal e-mails circulating about upgrades to Oracle’s database and CRM software this weekend could be one reason Oracle is very focused on a short turnaround, Mark surmised.

“We’re all just sitting around because we’re not sure what to do next. Salespeople don’t know what to sell. It’s very confusing around here,” he said.

The layoffs will certainly impact the local economy as PeopleSoft owns six multi-story buildings and the land they sit on in Pleasanton, Calif. Of the approximate 3,000 people working at corporate, Mark believes 2,000 won’t return.

Oracle turned off remote access to PeopleSoft’s VPN on Thursday and is expected to shut off the communications network later today, Mark said.

“Laying off as much as half of the staff of a company it fought so hard to acquire is definitely not the way for Oracle to win friends and influence people,” Michael Dortch, principal business analyst with IT infrastructure research firm Robert Frances Group. “Oracle is going to have a lot of explaining to do, to reassure IT executives and those PeopleSoft personnel with the option of remaining at ‘OracleSoft’ that Oracle’s intentions are honorable.”

Mark said a larger than normal crowd gathered at PeopleSoft corporate offices to gather personal effects, commiserate and go to lunch. Many will return next week to hand over ID badges and turn in laptops. Microsoft, IBM, SAP or headhunters for smaller companies have approached many employees including Mark.

For those employees returning on Monday, Oracle has yet to indicate how things will run.