Oracle Set to Make Job Cuts Following Siebel Deal

Oracle reportedly is set to announce that it will cut more than 1,000 jobs now that its acquisition of Siebel has closed.

Its US$5.85 billion purchase of the customer relationship management software company was finalized on Jan. 31, several months after the firms jointly announced the deal. It was one of several acquisitions Oracle has completed in the last few years, including, most famously, the hostile takeover of PeopleSoft.

The Fusion Initiative

The giant task of digesting these companies and integrating their various software applications is part of Oracle’s so-called Fusion initiative. If successful, the resulting structure and software will merge the best of all of the applications.

At the same time, customers of Siebel, JD Edwards and PeopleSoft will be able to stick to their original software decisions — at least for the medium term — if that is their choice.

Leveraging the Efficiencies

Oracle’s trimming is expected to coincide with the Fusion roadmap, although customers and competitors eager for a glimpse of what the integrated company will look like might have difficulty ascertaining any meaningful information from the staff reduction alone.

That is because these particular cuts are likely a bid to maximize the efficiencies that are typically expected from any acquisition.

“There will be some redundant jobs that Oracle is eliminating,” Nucleus Research Vice President Rebecca Wettemann told CRM Buyer. “That happens in any acquisition.”

Measured Look

A surprising number of mergers fail because of post-acquisition missteps, such as concentrating employee cuts solely in the acquired company and focusing too much on short-term savings.

It appears that Oracle has managed to avoid both of those traps. Jobs are likely to be eliminated not only in Siebel, but also in its own house, Wettemann predicts. Since beginning its acquisition spree, “Oracle has taken a measured approach when evaluating the merged employee base,” she said.

“It knows there are very talented people at both companies. Oracle is not treating this as a ‘we or they’ proposition but rather as something that needs to be done to make the strongest product and company possible.”

The same process was evident when PeopleSoft was acquired, she observed. If functions were duplicated, “Oracle looked at who was best for the job.” Some 5,000 positions were eliminated because of that $11.1 billion transaction — some from Oracle.

In addition to making the job cuts, Oracle is restructuring operations, which will also result in changes for the workforce. “Oracle is re-engineering its products, as well as [revamping] some internal operations. People will change jobs because of that too.”

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