The Oracle-PeopleSoft Inc. antitrust trial came to a close last week. But before it wrapped, Justice Department attorneys provided details on how many PeopleSoft employees Oracle intends to lay off if the deal proceeds, and Oracle CEO Larry Ellison voiced concern about Microsoft becoming a more serious competitor in the business-software market.
Ellison's list of competitors is much longer than the two primary ones identified by the government--PeopleSoft and SAP. His list includes Microsoft, other software rivals such as IBM, and even outsourcers. "The second Microsoft enters a market, prices drop like a rock," he said. "The only way to compete with that is you have to grow faster."
Earlier in the week, attention centered on a chart compiled by Oracle president Safra Catz and Ellison explaining why Oracle directors should proceed with the takeover. The chart shows layoffs of all 437 PeopleSoft sales reps, all 1,080 other sales and marketing staff, and 740 of 865 general and administrative workers. Oracle would retain 1,000 of PeopleSoft's 2,370 R&D staff. Savings from layoffs and the addition of PeopleSoft's 4,400 customers, Catz said, would let Oracle spread costs over a larger customer base.