Oracle Layoffs Not Just Ex-BEA Workers: Slowdown Ahead
Oracle's layoffs late last week, while apparently smaller than reports indicated, still show that the bellwether enterprise software company is feeling the effects of the pinch in corporate IT spending.
Wed, January 14, 2009
Computerworld — Oracle's layoffs late last week, while apparently smaller than reports indicated, still show that the bellwether enterprise software company is feeling the effects of the pinch in corporate IT spending.
One longtime U.S.-based Oracle consultant, who was laid off last Friday despite a decade of experience, said he had received "excellent performance reviews." But his work, which consisted of helping companies install and run their Oracle and PeopleSoft software, had slowed so much that the consultant had been "benched" the past two months. In Oracle parlance, that means he was not working on any client projects while still drawing a salary.
"The most bench time I'd ever gotten in the past was a month max," said the consultant, who agreed to an interview on the condition that he not be named. "So I saw the writing on the wall."
The Wall Street Journal , citing sources familiar with the matter, reported today that 500 Oracle employees in its North American sales and consulting divisions were laid off last Friday.
Oracle declined to comment.
While many of Oracle's layoffs are directly tied to acquisitions, such as its US$8.5 billion takeover of BEA Systems Inc. last year, "there are other factors at work here, such as the lower volume of business under current economic conditions," said Frank Scavo , an IT analyst with Strativa whose blog has closely tracked the Oracle layoffs.
Most of Oracle's offerings are large enterprise application software that require "major capital expenditures," he said, which is "more subject to recessionary pressure" than, for instance, software-as-a-service (SaaS) subscriptions.
Which may be why Oracle consultants, like the one who spoke to Computerworld , were hit hard. He was given a three-month severance package, which he called "a pittance."
Rival enterprise software vendor SAP AG also conducted a round of layoffs last week, cutting about 100 jobs in the U.S. and Canada. The reductions were related to SAP's "continuing integration of Business Objects ," and affected a range of positions, but were not related to the economy, according to a spokesman.
Oracle's layoffs, as reported by Computerworld on Monday, occurred worldwide.
In India, 40 employees in Bangalore were laid off, according to The Times of India . More than 60% of Oracle's 86,657 employees work outside of North America.
Oracle planned for layoffs long ago.
According to a Dec. 22 update to its "Fiscal 2008 Oracle Restructuring Plan" filed to the SEC, Oracle expects to spend nearly $39 million, mostly on employee severance, by the end of its fiscal year on May 30.
