Oracle To Cut 2,000 Jobs, Bolster Analytics Effort

"We're keeping 90 percent of Siebel support, development engineers, 90 percent of Siebel sales and sales engineers," Oracle CEO Larry Ellison told financial analysts and reporters on a conference call Thursday evening.

"The 2,000 number should not be subtracted from the 4,700 Siebel employees [coming in] but from the total role of 57,000 employees," said Oracle co-president Safra Catz. "There will be reductions throughout the company in many places. Less than half are coming in fact from Siebel."

Some cuts will come from back-office functions, and non-technical marketing people. And many will come from Oracle's own CRM development group, Ellison said.

"As we move to Fusion and next-generation CRM, we had more people than we needed to develop Fusion, a large number are coming from that duplication of effort," Ellison said.

Fusion is the name of Oracle's upcoming standards-based foundation that will underlie the next generation of functions now provided by Oracle, PeopleSoft, JD Edwards, and Siebel applications.

In addition, Oracle plans to highlight Siebel's analytics know how and will push those tools not only as standalone products but with its middleware, Ellison said, calling those tools a "hidden jewel" of the $5.85 billion Siebel acquisition, which was completed last week.

Siebel's analytics technology will "absolutely" be the foundation of Oracle's business intelligence effort going forward, Ellison said. There also will be an analytics "overlay" sales force to assist on sales of business intelligence that will work with applications and middleware sales teams, Ellison said.

Another casualty of the effort will be Siebel's "Nexus" effort, which was the CRM leader's planned next-gen CRM effort.

"Nexus was not a standards-based product. We are not going to continue that. We'll continue to support existing Nexus customers. There are very few of them," Ellison said.

Oracle also updated the company's financial expectations. The company expects profit for fiscal 2006 to increase 10 percent to 14 percent from $3.17 billion to $3.3 billion vs. $2.89 billion for the previous year. That would mean a profit of 60 cents to 62 cents per share, up from 55 cents.

Revenue for the now-combined company, is expected to rise 18 percent to 20 percent ,hitting $13.89 billion to $14.1 billion, according to Catz.

For the third quarter, it now expects profit to rise 31 percent to 36 percent from the year-ago period, representing growth of 17 percent to 19 percent.

With the Siebel buy coming after Oracle's acquisition of PeopleSoft, JD Edwards, and some smaller companies, the database kingpin is pushing aggressively into enterprise business applications. It now claims it is No. 1 in CRM and human resources applications worldwide. In this realm, Oracle faces off against ERP kingpin SAP, Walldorf, Germany.

This story was updated Friday to include profit and revenue expectations.