Analyst predicts 10,000 layoffs at Sun
Huge job cuts after Oracle acquisition
By Robert McMillan ShareThis
As many as 10,000 people could lose their jobs as the result of Oracle's $7.4bn acquisition of Sun Microsystems, a financial analyst predicted on Monday.
Excluding charges related to the restructuring, Oracle expects the Sun deal to contribute $1.5bn toward its earnings next year and $2bn 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," Oracle President Safra Catz said.
That profitability will come via layoffs, according to Tony Sacconaghi, a well-respected technology analyst with Sanford C. Bernstein & Co. He had been forecasting $800m in operating profit for Sun's fiscal 2010, rather than the $1.5bn predicted by Oracle.
"In order to deliver $1.5B in op. profit, [Oracle] would need to boost profits by $700m assuming no material revenue erosion, which suggests incremental headcount reductions of 5,500 to 10,000 depending on timing," Sacconaghi wrote in a research note released soon after the deal was announced. Oracle declined to comment on any possible layoffs.
Huge job cuts after Oracle acquisition
By Robert McMillan ShareThis
As many as 10,000 people could lose their jobs as the result of Oracle's $7.4bn acquisition of Sun Microsystems, a financial analyst predicted on Monday.
Excluding charges related to the restructuring, Oracle expects the Sun deal to contribute $1.5bn toward its earnings next year and $2bn 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," Oracle President Safra Catz said.
That profitability will come via layoffs, according to Tony Sacconaghi, a well-respected technology analyst with Sanford C. Bernstein & Co. He had been forecasting $800m in operating profit for Sun's fiscal 2010, rather than the $1.5bn predicted by Oracle.
"In order to deliver $1.5B in op. profit, [Oracle] would need to boost profits by $700m assuming no material revenue erosion, which suggests incremental headcount reductions of 5,500 to 10,000 depending on timing," Sacconaghi wrote in a research note released soon after the deal was announced. Oracle declined to comment on any possible layoffs.
