January 25, 2010

Now that European officials have rubber-stamped Oracle's $7.4 billion takeover of Sun Microsystems -- the last major hurdle for the deal -- could thousands of layoffs be far behind?

The next big date in the acquisition's history is Jan. 27, when Oracle CEO Larry Ellison outlines the software giant's plans to expand into the hardware and systems business. Part of that roadmap could include shuttering some of Sun's less profitable product lines and slashing thousands of jobs, analysts say.

"You would expect some level of redundancy in accounting and marketing, for instance," says Al Gillen, a software analyst at market researcher IDC. "On the hardware side, there is no overlap. But there is on the (operating systems) side."

Sun employs 28,000 people worldwide, including more than 5,000 at its main campuses in Santa Clara, Calif., and Menlo Park, Calif. Oracle has more than 83,000 employees around the world.

Both companies are mum on possible layoffs. In a memo to employees last week, Sun denied one analysts' prediction that up to half of Sun workers could lose their jobs.Oracle has high hopes for Sun:

It expects a $1.5 billion profit from Sun in the next year. But such lofty goals probably require hefty cuts in Sun's workforce, Gillen and others say. "Oracle has to move quickly on this because Sun's business has meanered since Oracle announced its acquisition (of Sun in April 2009)," Gillen says.

Source:-http://www.pcworld.com