Oracle Likely to Slash Jobs Aggressively at Sun

I can’t argue with the arithmetic Tony Sacconaghi, a technology-market analyst at Sanford C. Bernstein & Co., has done.

In analyzing the acquisition-announcement proclamations of Safra Catz, president of Oracle, regarding the profitability that the acquiring company intends to squeeze from Sun Microsystems, Sacconaghi concludes that Oracle could attain those earnings numbers if it shed as many as 10,000 Sun employees.

In a statement earlier today, Catz said Oracle expects the Sun deal to contribute $1.5 billion toward its earnings next year and $2 billion in the second year of the acquisition, making it “more profitable in per-share contribution in the first year than we had planned for the acquisitions of BEA, PeopleSoft and Siebel combined.”

Crunching the numbers, Sacconaghi concludes that Katz’ earnings targets suggest “incremental headcount reductions of 5,500 to 10,000 depending on timing.”

Sun has been executing staff cuts of its own, but any Oracle plan is likely to be far more aggressive in that regard. For now, Oracle has no comment. I wouldn’t expect them to tip their hands regarding headcount reductions.


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