Oracle to Cut as Many as 10,000 Jobs Following Sun Deal

By Jessica Davis  |  Posted 2009-04-20
Oracle's acquisition of Sun Microsystems will likely mean layoffs and job cuts of 5,500 to 10,000 workers.

The estimate was calculated from Oracle's forecast of how much operating profit the Sun acquisition would contribute in the first year and the second year following completion of the deal, and was released by Bernstein Research in a brief report following the announcement of the Oracle-Sun deal.

"To deliver $1.5 billion in operating profit, Oracle would need to boost profits by $700 million, assuming no material revenue erosion, which suggests incremental headcount reductions of 5,500 to 10,000 depending on timing," says Toni Sacconaghi, Jr., senior analyst and author of the Bernstein report. Sun's current work force is about 33,500.

Following Oracle's PeopleSoft acquisition in 2005, Oracle cut 5,000 jobs. Oracle cut 2,000 jobs in its acquisition of Seibel in 2006.