A San Jose Mercury News report indicates that once Oracle’s $7.4 billion acquisition of Sun Microsystems is finalized some time this summer, Oracle is likely to cut thousands of positions among the Sun faithful.
However, the question remains how many and whether those cuts will simply be part of the layoffs Sun itself announced the company would make. Sun already has cut nearly 3,000 of the up to 6,000 jobs the company said it would be cutting in a November 2008 announcement. Sun cut about 1,300 jobs in January of this year, and confirmed that it would be cutting 1,500 more beginning the week of March 30. How many more will be required?
With Oracle at the helm, some observers say they believe many more cuts are in store for the software and system maker. Indeed, some say Oracle could cut upward of one-third to half of Sun’s work force of 33,000 employees. That seems quite high. However, neither Oracle nor Sun is commenting on potential layoffs coming out of the acquisition. Yet, in an acquisition such as this one, cuts are inevitable as there will be duplication in many roles.
A Sun employee who requested anonymity characterized the mood among employees at Sun headquarters in Santa Clara, Calif., as one of “uncertainty,” despite the hopeful memo Sun CEO Jonathan Schwartz sent to his troops.
According to the report in the Mercury News:
““‘A lot of jobs will be cut,’ said Cassatt Software CEO Bill Coleman, a Sun alumnus who also co-founded BEA Systems, which Oracle acquired last year for $8.5 billion.”“
The report also said:
““‘We do know from Oracle’s past mergers that they have always made good on the commitments they made to the Street in terms of cost-cutting,’ said Pacific Crest Securities analyst Brendan Barnicle. ‘They come into their deals with a very good understanding of their potential to cut costs.'”After swallowing PeopleSoft in January 2005 for $10.3 billion, Oracle cut about 5,000 jobs, or 9 percent of the combined work force at the time. After acquiring Siebel Systems in 2006 for $5.85 billion, Oracle slashed about 2,000 jobs, or about 3.5 percent of its global work force.”“
Meanwhile, as Sun employees await word on just what Oracle will do regarding headcount, many of them cannot help but wonder how the Sun work force would fare had IBM acquired the company. That is hard to say, as Big Blue is undergoing its own layoff situation. IBM has laid off nearly 10,000 employees in 2009, according to the Alliance@IBM, a union organization representing a group of IBM workers.