Oracle to lay off 2000 after Siebel acquisition

The integration of Siebel Systems into Oracle will result in a reduction of 2000 in the total workforce of the combined companies, but a majority of the layoffs will affect Oracle employees.

Oracle would retain 90 per cent of Siebel's support and development engineers, sales representatives and technical sales consultants,the company's chief executive officer, Larry Ellison, said.

Non-technical marketing employees and back-office workers would be laid off, he said. When the integration was complete, Oracle's work force would total about 55,000.

Ellison and other executives spoke on a webcast to discuss the impact of the deal worth about $US5.85 billion.

On the technology front, Siebel Systems software will form the basis of Oracle's customer relationship management (CRM) offering following integration of the two companies, according to Oracle.

Siebel's business analytics technology also would play a key role in Oracle's product line, being sold as an attachment to Oracle products and software that came from recent acquisitions PeopleSoft and J.D. Edwards in addition to products from Siebel, Ellison said.

"It's one of the hidden jewels" that Oracle got with the acquisition of Siebel, which closed earlier this month, he said.

Oracle also provided a more detailed financial forecast for its fiscal third quarter and preliminary guidance for its fourth quarter.

In the third quarter, ending this month, the company now expected total revenue to grow between 13 per cent and 15 per cent from the year-earlier quarter, compared with a range of 9 per cent to 12 per cent in the previous forecast, Oracle's president and chief financial officer, Safra Catz, said.

Using generally accepted accounting principles (GAAP), Oracle expected revenue growth between 17 per cent and 19 per cent. The company forecast third-quarter GAAP earnings per share of $0.13 or $0.14, she said.

For the fiscal fourth quarter, Oracle's preliminary guidance is for total non-GAAP revenue growth of 10 per cent to 14 per cent, with GAAP revenue up 13 per cent to 17 per cent from a year earlier.

The integration of Siebel is likely to be less wrenching than the aftermath of Oracle's earlier acquisition of PeopleSoft because there was less overlap between the product lines of the two companies, analysts said.

There was overlap between Siebel's offerings and products that Oracle brought in from PeopleSoft, AMR Research's Rob Bois, said.

In the long run, Oracle would probably do a good job with its strategy of combining parts from many companies into Fusion, but along the way it might have a hard time during the transition between now and 2008, Bois said.

"It's a little bit of a balancing act on Oracle's part," Bois said.

The company wiould also be in the awkward position of trying to sell the benefits of many separate products, he said.

"For now, it's kind of antithetical to their traditional message of a single unified suite," Bois said.