Oracle to Eliminate 2,000 Jobs

Business software maker Oracle Corp. said Thursday that it would cut about 2,000 jobs, or more than 3% of its workforce, after its recent $5.85-billion takeover of Siebel Systems Inc.

Redwood Shores, Calif.-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 during a conference call.

About 90% 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, Chief Financial Officer Safra Catz said. The cost cutting should lower Oracle’s expenses by at least $400 million annually, Catz said.

Oracle already has handed out pink slips to 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 details about the layoffs, Oracle also lowered its profit projections for the rest of its fiscal year. Excluding acquisition charges and other expenses unrelated to its continuing business, Oracle expects to earn 18 cents a 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 26 cents a share, excluding certain expenses, also a penny below analyst estimates.

Oracle’s shares gained 12 cents to $12.69 but lost 8 cents in after-hours trading after the announcement.

This marks Oracle’s second major shake-up in a little more than a year. Shortly after completing an $11.1-billion acquisition of PeopleSoft Inc., Oracle fired 5,000 workers.