The layoffs represent 9% of the combined company’s payroll. The company did not say from where the jobs will be cut, but it is expected that most will be cut from PeopleSoft’s 11,000-strong workforce.
Oracle said that 90% of PeopleSoft’s product development and support staff will be retained, suggesting that most of the layoffs will come from sales and adminisitrative functions.
That decision is a further attempt by Oracle to show that it plans to make good on its promise to continue to support and develop PeopleSoft’s products, rather than strongarming customers to migrate to Oracle equivalents.
PeopleSoft’s approximately $1bn in maintenance contracts were a key driver for the deal, so keeping on the support staff is not unexpected.
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, said Oracle CEO Larry Ellison.
Oracle spent much of the 18-month hostile takeover battle seeking to assure PeopleSoft customers that their investments would be secure, while at the same time sowing enough doubt to hurt PeopleSoft’s pipeline.
PeopleSoft itself introduced a controversial Customer Assurance Program, which would have saddled a hostile acquirer with huge refund liabilities, should they quickly reduce support for or stop developing PeopleSoft products.
The PeopleSoft development team will finish the development and deployment of PeopleSoft version 8.9, and then begin development of the next upgrade to PeopleSoft products, version 9.0, Oracle said.
The 5,000 layoffs are about 1,000 less than had been previously touted, though it’s not yet clear whether there will be any further rounds of terminations as the two companies integrate.
It’s not clear how many of the layoffs will come from the old JD Edwards & Co business, which PeopleSoft acquired shortly after Oracle’s takeover bid began. Oracle was never particularly interested in taking on JDE.
Further details are expected tomorrow. Oracle is planning a four-hour meeting at its California headquarters to spell out its corporate strategy, including details of its product and support commitments.
However, customers are only part of the picture. Oracle is also finding dissent from within, with many employees from the PeopleSoft side of the house reportedly disgruntled with the new ownership.
Staff reportedly gathered to mourn PeopleSoft on Friday, even before it became clear who would be losing their jobs, with some employees quoted as saying they would rather be fired than work for Oracle.
The corporate cultures of the two firms are said to be quite different, with PeopleSoft said to have a laid-back Silicon Valley working environment similar to the old Hewlett-Packard, while Oracle’s personality, once described by PeopleSoft’s CEO as sociopathic, is defined by the abrupt, purposeful Ellison.
It may not help matters that Oracle reportedly planned to inform employees of their job status via the mail over the weekend, rather than in person this week.
