Analyst Predicts More Oracle Layoffs

 
 
By Matthew Hicks  |  Posted 2002-06-07
 
 
 
Two days after Oracle Corp. Chairman and CEO Larry Ellison brushed aside suggestions of layoffs, the software maker is facing renewed projections of cutbacks from Wall Street analysts.

The latest analyst, George Gilbert of Credit Suisse First Boston, wrote in a research note on Friday that "industry sources" are saying that Oracle is in the process of cutting 1 percent to 2 percent of its workforce, which would be between 400 and 800 employees. Oracle, which develops database and enterprise software, has 42,000 total employees.

But an Oracle spokeswoman today refuted the latest suggestions of employee cutbacks beyond those she confirmed earlier this week.

"People are saying these layoffs are happening, and its not true," said spokeswoman Jennifer Glass.

Glass had said that a week ago the Redwood Shores, Calif., company let go 200 employees out of 10,000 in its application development group. That move was part of a plan from Ellison in March to streamline the development organization. The layoffs resulted from combining the ERP (enterprise resource planning) and CRM (customer relationship management) development groups into a single e-business development group, officials said.

Ellison himself on Wednesday said no layoffs were planned at Oracle and chided those characterizing the earlier reduction of 200 as a layoff.

In the latest research note, Credit Suisse First Boston noted that the layoffs began a week ago and would be focused in CRM development. But it went on to report plans for "additional reductions primarily in sales and marketing."

On Monday, Lehman Brothers analyst Neil Herman wrote that several sources are saying "significant employee reductions" were likely at Oracle in the next several weeks. He didnt specify numbers because of a lack of corroboration from sources on the numbers.

Ellison has been critical of stock market analysts. While not addressing their layoff predictions directly, Ellison did say that they are "being wildly irresponsible on the way down" in their suggestions that Oracle was struggling to meet its fourth quarter revenue target.

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