Following the close of the purchase it said staff losses would come from both Oracle and PeopleSoft as it aimed to keep the best people wherever they came from, but inevitably there has been a higher casualty rate on the PeopleSoft side.
Overall there has been a 9% headcount reduction over the combined entity, leaving about 50,000 staff. Severance and real estate costs relating to PeopleSoft are estimated to come in at between $400m and $600m, compared to $100m to $300m for severance costs at Oracle. Most of the costs are cash charges.
The street was indifferent to the announcement with Oracle’s share price gaining just 0.7%, to close at $13.77 on Monday, the day of the filing.
Having paid $10.3bn in cash for PeopleSoft, Oracle is under pressure to show value following the hard won acquisition, particularly since its mooted delivery date for Project Fusion, the new service-based architecture and application platform that will combine Oracle, PeopleSoft and JD Edwards technology, is at least three years out.
It has also been highly critical of PeopleSoft, claiming that it had failed to capitalize on its purchase of JD Edwards, something financial analysts have tended to agree with.
Meanwhile, its main competitor SAP AG is gearing up for the Oracle challenge with plans for similar dramatic architectural developments, following its announcement last week that it will plough profits resulting from a strong fiscal 2004 into developing NetWeaver in to a highly componentized, business process platform.
