Business software maker Oracle Corp will cut about 2,000 jobs, or more than 3 percent of its work force, as it digs for bigger profits from its recent US$5.85 billion takeover of rival Siebel Systems Inc.
Redwood Shores, California-based Oracle inherited 4,700 Siebel workers in the acquisition, but most of the cuts will be concentrated among employees on the company payroll before the deal closed last week, Chief Executive Larry Ellison told analysts on Thursday during a conference call.
About 90 percent of Siebel's customer support, engineering and sales staff is being retained, Ellison said.
After the purge is completed, Oracle will employ about 55,000 workers worldwide, according to Safra Catz, Oracle's chief financial officer. The cost cutting should lower Oracle's expenses by at least US$400 million annually, Catz said.
Oracle already has notified some of the affected employees and expects to complete most of the layoffs during the next few weeks, spokesman Bob Wynne said.
The job cuts fell within the range projected by industry analysts nearly five months ago when Oracle first announced plans to buy Siebel, a once-bitter rival that had been mired in a deep sales slump.
Besides providing more details about the reduction, Oracle also lowered its profit projections for the rest of its fiscal year.
Excluding the acquisition charges it incurred and other expenses unrelated to its continuing business, Oracle expects to earn US$0.18 per share during the current quarter, a penny below the average estimate among analysts surveyed by Thomson Financial.
In the following quarter, Oracle expects to earn US$0.26 per share, excluding certain expenses, also a penny below analyst estimates.
Oracle's shares gained US$0.12 to close at US$12.69 on the Nasdaq Stock Market, then backtracked by US$0.08 in extended trading.
This marks Oracle's second major shake-up in a little over 12 months. Shortly after completing an US$11.1 billion acquisition of PeopleSoft Inc, Oracle laid off approximately 5,000 employees, including a large chunk of its own work force.
Oracle has spent nearly US$20 billion on acquisitions during the past 14 months in a bid to lure customers away from Germany-based SAP, the leading maker of computer software that enables enterprises to automate a wide range of administrative tasks.
The expansion so far has created a much larger company worth less than when the expansion began. Oracle's market value has declined by about US$4 billion since the end of 2004.
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