Safra Catz, CFO for the California-based applications and database software giant, announced the planned cuts in an analyst and investor conference call yesterday afternoon. Some media reports had earlier estimated that 1,000 jobs would go.
Such a move is not unexpected following the announcement of Oracle’s $5.85bn takeover of CRM vendor Siebel Systems Inc five months ago. That deal closed last week.
Most of the cuts are a direct result of the Siebel integration. Yesterday Oracle said it had let go of 118 Siebel staff at the company’s San Mateo, California headquarters.
But it could also mean losses at Oracle as well.
At the time of its takeover, Siebel had around 4,700 employees – substantially down from the 9,000 during the peak of its success. Siebel had slashed its own workforce over the past couple of years in the face of flagging sales and it was clear from the outset of the merger that not all of its employees would be working for Larry Ellison.
Clearly the mathematics of mega-mergers and acquisitions also require leaner companies to compete and remain profitable.
Oracle did a similar hatchet job on its workforce last year after buying rival business applications firm PeopleSoft Inc for $11.1bn. That time Oracle carved off 5,000 overlapping jobs.
Oracle currently employs 51,000 staff worldwide and reported profits of $1.3bn for the first half of its fiscal year. The cuts announced yesterday would leave it with around 55,000 including Siebel employees.
Oracle issued guidance for its third quarter in the same analyst call. Oracle now expects revenue for the quarter to be up 17% to 19%, on sales ranging between $3.45bn to $3.50bn. Wall Street had pegged the quarter at $3.45bn.
For the fourth quarter Oracle expects the revenue to be up 13% to 17% on a range of $4.39bn and $4.55bn. Wall Street expected $4.37bn.
Oracle expects third quarter per-share net income to range from 13 cents to 14 cents, with the fourth quarter range between 21 cents to 23 cents per share.
