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Oracle axes 2,000 employees, Nexus

Oracle is giving 2,000 employees the pink slip as it folds Siebel into its organization and is bringing an end to Siebel's component assembly initiative.

One week after Siebel Systems Inc.'s shareholders accepted its $5.85 billion takeover offer, Oracle Corp. issued financial guidance and layoff plans yesterday.

Oracle will lay off 2,000 employees, but will keep 90% of Siebel's product development, product support and sales team, officials said on a Webcast conference call. The best performing CRM salespeople at Oracle will join Siebel's sales team to become a separate CRM sales force within Oracle. A majority of the layoffs will come from the Oracle side of the combined companies.

"We're starting off with a very strong CRM organization," said Safra Catz, Oracle co-president and chief financial officer. "Our policy here was no change." @18167

Oracle reiterated its commitment to make Siebel technology the basis for CRM development at Oracle moving forward. Oracle intends to marry the best technology of all its recent acquisitions, including PeopleSoft, J.D. Edwards & Co. and Retek into one application stack under a program called Fusion. Oracle also pledged to continue support to all Siebel applications the company currently supports. Oracle's future CRM strategy will not, however, include Siebel's Project Nexus, a services oriented architecture initiative Siebel rolled out at its recent CustomerWorld that would offer component assembly of CRM technology.

"Nexus will not be basis of Fusion," CEO Larry Ellison said. "We're building Fusion entirely on standards. Nexus was not a completely standards-based product. We are not going to continue that. We will support existing Nexus customers although there are not many."

Ellison also said that Oracle had recently renewed Siebel's contract with IBM to host its OnDemand CRM application in IBM data centers. However, they will move that application to a standard Linux operating system, an Oracle database on Intel-based machines "very, very quickly," Ellison said.

Executives also said they might not be done with their buying spree. Oracle has spent some $19 billion in the last two years buying up rivals that develop business applications. Catz said that the company is still prepared to make some "minor acquisitions" in 2006.

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