All the talk of layoffs at Sun Microsystems in the wake of the $7.4bn acquisition of the company by Oracle was apparently a bunch of hogwash.
Prior to a five-hour extravaganza where Oracle and Sun executives will detail roadmaps and plans in the wake of the merger, Oracle chief executive officer, Larry Ellison, made the rounds to selected members of the press to give them a sneak peek at Oracle's plans.
Ellison told the New York Times (here) and the Wall Street Journal (there), that only about 2,000 employees would be eliminated from the Sun payrolls in the wake of the merger. This contrasts with the ridiculously high estimates that some people on Wall Street had been making for Oracle to extract its $1.5bn profit targets out of what will presumably become the Sun division, at least for the short term.
To be truthful, Sun did a lot of Larry's layoff work for him, slashing 6,000 jobs in November 2008 and another 3,000 in October 2009. Some tongues had been wagging that half of Sun's approximately 24,000 remaining employees after that last layoff would get whacked. Those 2,000 additional employees that Oracle will now cut will most likely be back office functions that Oracle central can handle.
Ellison also told the Times, Oracle will be hiring another 2,000 engineers and sales people to push Sun products. So the net effect of the Oracle deal might be essentially no change in headcount at the Sun division.
Why would Oracle do this and still be able to make its goal of pulling $1.5bn in profits out of Sun in the first twelve months it has control, and then another $2bn in the year after? Remember, Sun has been limping along, more or less at breakeven, for years and years, which is why it was weak enough to be acquired in the first place.
What Oracle seems intent on doing is ramping up the Sun direct sales, going after the top 4,000 accounts in the world with a vengeance. Even more importantly, it wants to do so with an integrated set of systems, from the microprocessor chip all the way up to industry-specific applications.
Oracle will also shut down businesses that Sun has been pursuing that do not make money, according to the reports. That could include backtracking on low-end x64-based servers, but not Sparc-based machinery, which will get a boost.
Hopefully, as El Reg has encouraged, in a sensible and quick manner that gets Sparc iron back in the hunt against x64, Power, and Itanium alternatives. A renewed and sped-up partnership with Sparc64 chip maker Fujitsu seems to be in order, but Fujitsu has its own issues with chips.
Ellison told the Times that he expected Sun president and chief executive officer, Jonathan Schwartz, to resign from the combined companies. He also said that he hoped that Sun co-founder, Scott McNealy, would stick around in some fashion.
McNealy's sign-off to Sun employees, which we reported on earlier here, certainly did not give the impression that McNealy had any plans to work for Ellison.
Team Reg will keep you posted as more information becomes available. ®