Oracle to lay off more Sun workers

The company will take a charge of up to $650 million this year to cover an undisclosed number of layoffs

Oracle is making further job cuts related to its acquisition of Sun Microsystems, primarily in Europe and Asia, the company said in a regulatory filing Friday.

Oracle said it will book up to US$825 million in additional charges for the acquisition this calendar year, including $550 million to $650 million primarily for severance payments.

It didn't say how many jobs it plans to cut, and an Oracle spokeswoman said the company had no comment beyond what is in the filing. Oracle said it began notifying affected employees on May 28. The cuts will eliminate redundancies and improve efficiencies, Oracle said.

Sun had already been cutting jobs before Oracle acquired the company earlier this year, and some analysts have predicted further deep cuts by Oracle. At least one analyst predicted that Oracle would lay off half of Sun's workforce to get the company back to profit.

Oracle CEO Larry Ellison dismissed that claim angrily in January, calling the reports "highly irresponsible."

"The Sun people went through enough angst without having to read this garbage that you're writing," he told reporters and analysts in January. "The truth is, we're actually hiring 2,000 people over the next few months to beef up these businesses, and that's about twice as many people as we'll be laying off.

"We're not cutting Sun to profitability, we're growing Sun to profitability," Ellison said at the time.

The remainder of the additional charges announced Friday include up to $115 million related to facilities costs and up to $60 million related to contract termination costs. They are in addition to the $325 million in charges Oracle had already announced.

Oracle announced its plan in April last year to acquire Sun for $7.4 billion. The deal was held up by regulators in Europe and did not close until January.

Sun announced plans to lay off 3,000 workers, or about 10 percent of its workforce, last October while it was waiting for the Oracle deal to close. A year before that, it announced layoffs of 5,000 to 6,000 workers.

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James Niccolai

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