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Analyst Says Oracle Laid Off 1% Of Workforce

It appears Oracle is doing some layoffs, with one analyst putting the number at 1% of the company's 85,000-strong global workforce. Oracle is perhaps the most financially healthy company in the software business. If it's worried about maintaining its strong profit margins, this is one of the biggest indications yet of a downturn in the software applications sales and services industry.
It appears Oracle is doing some layoffs, with one analyst putting the number at 1% of the company's 85,000-strong global workforce. Oracle is perhaps the most financially healthy company in the software business. If it's worried about maintaining its strong profit margins, this is one of the biggest indications yet of a downturn in the software applications sales and services industry.Peter Goldmacher, an analyst with Cowen & Co. in San Francisco who used to work at Oracle back in the early days, said in a Jan. 12 note that he "believe[s]" the cuts were spread across every discipline, with a particular focus on services and sales and marketing. Oracle hasn't commented on the layoffs yet, but it will probably issue a press statement and/or will file required paperwork with the appropriate government agencies within a few days, after it's gone through the necessary HR channels.

Oracle has been working to cut costs, focusing on its research and development expenditures and offshoring more work to lower-cost regions, Goldmacher noted. He indicated that he's closely watching Oracle's services growth, which is going to be slower than it was last year.

Goldmacher put out another report today, which notes a "worsening underlying market" in software applications. He adds that the weakness has recently been offset by "customers flushing budget," so fourth-quarter results (October through December) may be "better than underlying trend." In the last few weeks, Cowen & Co. has lowered its financial performance expectations for most of the software companies it follows for the first quarter, and is taking a "cautious tone" for the quarter.

That means it will be a scary few months for those employed in the software industry. However, it could give be a good time for CIOs and other software buyers to hone their negotiation skills.