Sun, Jan 16, 2005 - Page 11 News List

Oracle announces layoffs after PeopleSoft takeover

NY TIMES NEWS SERVICE , SAN FRANCISCO

One week after completing its contentious takeover of PeopleSoft, Oracle on Friday began sending layoff notices to some of the 11,700 employees working at its former rival.

Oracle said in a five-paragraph statement, released after the market closed, that it was laying off 5,000 employees, or nearly 10 percent of the combined Oracle-PeopleSoft work force.

Several people close to Oracle said employees would learn if they are out of a job when overnight packages were to be delivered to their homes yesterday.

The company did not say which portion of the 5,000 employees to lose their jobs worked for the former PeopleSoft and which at Oracle. Nor did the company's statement mention anything about severance packages.

Oracle formally completed its US$10.3 billion acquisition of PeopleSoft on Jan. 7. For years, Oracle, the undisputed leader in the corporate database market, has been struggling to gain a larger presence in the multibillion-dollar industry of back-office software that companies use to manage their finances, inventory and procurement needs. In that market, PeopleSoft was the uncontested No. 2, behind SAP of Germany.

Oracle said last summer that if it succeeded in a takeover of PeopleSoft, it would lay off as many as 6,000 PeopleSoft employees.

In an interview last month, Oracle's founder and chief executive, Lawrence Ellison, promised that his company would release at least one more major upgrade of PeopleSoft's flagship software product, and provide customers technical support for at least 10 more years.

"It's still not clear to me how, with so large a reduction in the work force, they're going to be able to continue to deliver the same level of service to PeopleSoft's customers," said Mark Smith, the chief executive of Ventana Research, a research firm in Silicon Valley.

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