Thousands of Sun Workers Fear Oracle Will Lay Them Off

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Half Sun’s 33,000 staff could go when Oracle takes over, according to a newspaper report

Thousands of Sun workers will almost certainly lose their jobs when Oracle’s acquisition of Sun Microsystems is finalised this summer. As many as half the company may go, according to a report in the San Jose Mercury News.

However, it is not yet clear how many redundancies Oracle will require beyond those Sun had already announced. The company said in November 2008 that it would be cutting up to 6000 jobs; it shed 1300 in January, and started to lay off another 1500 at the end of March. 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 upwards of one-third to half of Sun’s work force of 33,000 employees. Neither Oracle nor Sun is commenting on potential layoffs coming out of the acquisition, but in an acquisition such as this one, cuts are inevitable as there will be duplication in many roles.

A Sun employee who requested anonymity characterised the mood among employees at Sun headquarters in Santa Clara, California, 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 cycle, with nearly 10,000 employees going in 2009, according to the Alliance@IBM, a union organisation representing a group of IBM workers.

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