Oracle lets go 5,000 after takeover

SAN FRANCISCO — Oracle Corp. will fire 5,000 workers in the financial fallout from the business software maker's recently completed $10.3 billion takeover of rival PeopleSoft Inc.

The job cuts outlined Friday represent a 9 percent reduction from the roughly 55,000 employees on the two companies' combined payrolls.

The purge is less severe than Oracle envisioned when it first set its sights on PeopleSoft 19 months ago. At that time, Oracle planned to jettison at least 6,000 PeopleSoft employees, according to court testimony during the tense legal battle leading up to the takeover.

Piper Jaffray & Co. analyst Tad Piper believes Oracle still intends to reach its original target of 6,000 layoffs but expects the company to make the remaining job cuts very gradually.

Oracle began delivering the layoff notices Friday, but some of the affected workers might not learn of their fate for up to 10 more days. The company said it will retain 90 percent of the engineers that develop and support products, but didn't provide other details about what types of jobs are being cut.

Industry analysts expect the layoffs to be concentrated among PeopleSoft's 11,225 employees — a bias displayed by most corporate buyers when cutting jobs after a takeover.

Many of PeopleSoft's employees have been bracing for their final day on the job since Redwood Shores-based Oracle signed the papers last month to buy one of its biggest rivals in the business applications software market.

The sense of foreboding created a somber atmosphere at PeopleSoft's Pleasanton headquarters as employees gathered in small groups to say their final good-byes.

Hours before Oracle's Friday announcement, employees turned a PeopleSoft sign into a makeshift shrine of flowers, candles and company memorabilia. An inflatable doll dressed in black wore a button that read "Oracle" with a slash through it.

"We're mourning the passing of a great company," said 13-year PeopleSoft veteran David Ogden, one of 26 workers from the company's creative services department who came to work wearing black and the "No Oracle" buttons.

Other PeopleSoft employees, flashing the defiance that characterized the company's staunch resistance to the takeover bid, said they would rather be fired than work for Oracle and its ruthless chief executive, Larry Ellison.