Oracle to cut 5,000 jobs

[notiCIas]

Oracle to cut 5,000 jobs

Software maker says combined work force after PeopleSoft acquisition will total 50,000 employees.

January 14, 2005: 6:27 PM EST



SAN FRANCISCO (Reuters) - Oracle Corp. will cut 5,000 jobs as it combines with PeopleSoft Inc., the business software rival it acquired for $10.3 billion after a bitterly fought takeover battle.

The cuts, which were in line with Wall Street expectations, represent about 9 percent of the companies' combined work force of 50,000 people. Financial terms, including any charges or cost savings, were not disclosed.

In a statement, Oracle pledged to keep more than 90 percent of PeopleSoft's product development and support employees, implying that most of the cuts would hit administrative and marketing positions made redundant after the deal closed last Friday.

 
The ongoing support of PeopleSoft products -- used by companies to manage payroll, human resources and manufacturing operations -- was a point of contention during the takeover battle, with many high-profile customers fearing Oracle would drop support for PeopleSoft products altogether.

"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 Lawrence Ellison said in a statement, describing specific plans to develop new versions of PeopleSoft software.

Notifications of the job cuts began Friday and the majority will be completed over the next 10 days, Oracle said in a statement. Further details on the integration plans will be given next week, it said.

 
Shares of Oracle (Research) rose 15 cents, or 1.1 percent, to $13.63 on Nasdaq. In after-hours trading, its shares were unchanged.

Marked by heated courtroom battles and the ouster of PeopleSoft's chief executive, the 18-month takeover saga finally concluded after Oracle sweetened its offer and won regulatory approval for the deal.

The deal gives Oracle the heft to compete against SAP AG, its European rival in business planning software, but also presents technical challenges as the company works to create a combined Oracle-PeopleSoft software package, said Clark Chang, an analyst with Fulcrum Global Partners.

"The real revenue synergy of this acquisition happens when the combined version comes out in about three years from now," Chang said.