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Friday, January 14, 2005

The ax begins to fall at PeopleSoft

Still waiting for word on total headcount cuts by Oracle at PeopleSoft, but there's some news out of the Pacific Rim:
The New Zealand Press Association confirmed 15 of PeopleSoft's 50 NZ staff have been let go and said there was a similar cleanout in Australia. News.com reported 200 jobs would be lost in the Asia Pacific region alone.
Yesterday, CNET reported that Oracle has been taking a rather insensitive approach to how it fires people:

Oracle appears to be adding insult to injury in its merger with PeopleSoft--taking the unusual step of notifying workers of their termination by sending pinks slips via express mail to their homes.

Shipments to thousands of PeopleSoft employees across the country are expected over the weekend, according to sources close to the company. Those spared pink slips will get packages too--containing new Oracle employment contracts....

"The view of most of the employees out there is that it's a really callous way to do it," said Joe Davis, chief executive of Coremetrics and a former group vice president at PeopleSoft who stays in touch with his former co-workers.

"They view it as just another in a series of steps where they feel like they're not being treated in a very humane way."
Because employees will be receiving pink slips by mail over the weekend we won't know the full impact until sometime next week. The number 6,000, or half of PeopleSoft's employee base, has been mentioned both by Ellison last year and more recently by several industry analysts. But whatever the final number turns out to be, so far, Oracle's approach does not bode well for it's stated goal of keeping the best of PeopleSoft's people on board. And that doesn't bode well for ongoing support of PeopleSoft's customers. Stay tuned.

Update, 2:45 p.m. According to news wires, Oracle is now saying that the cuts will hit 5000 employees, or 9% of the Oracle/PeopleSoft combined headcount. Oracle doesn't say it, but that's about 42% of PeopleSoft's headcount, if all the cuts fall on PeopleSoft. But there's no telling how many of the cuts were against Oracle headcount vs. PeopleSoft's.

Update, 5:05 p.m. The Denver Post is reporting on the impact of the layoffs among PeopleSoft employees of the former J.D. Edwards facilities. Estimates run from 100 to 1000 heads to roll.

Update, Jan. 15. This is turning into a case study on how NOT to do a layoff. The Los Angeles Times is reporting that Oracle is apparently stringing out the layoffs over a 10 day period.
Oracle created more uncertainty for PeopleSoft veterans by noting in an afternoon statement that although some employees would learn their fate Friday, many others would hear over the next 10 days — or even later. More commonly at big businesses, layoffs occur on a single day.

A 10-day layoff period "is just leaving the organization to go over it and over it, like a recurring nightmare," said outplacement expert John Challenger of Challenger, Gray & Christmas Inc. "Especially in a situation where there was such antagonism between the leaders, this almost seems vindictive."
Again, I say that if Oracle intends to keep the best and the brightest on board, this is not the way to do it. If PeopleSoft's support for customers suffers as a result of Oracle's mishandling of the layoffs, there could be a real danger of triggering PeopleSoft's Customer Assurance Program.

Related posts
Oracle/PeopleSoft employees face Black Friday
PeopleSoft's final gift to customers

by Frank Scavo, 1/14/2005 01:45:00 PM | permalink | e-mail this!

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