Oracle: Okay, So Maybe We Are Cutting Sun to Profitability.
“We’re not cutting Sun to profitability, we’re growing Sun to profitability.”
Oracle CEO Larry Ellison said that back in January as the company closed its $7.4 billion acquisition of Sun. Interesting, then, to read Oracle’s latest 8-K filing in which the company adds up to $825 million in restructuring costs to the buyout–some 80 percent of them evidently earmarked for employee severance payments at Sun’s European and Asian outposts. The company had initially projected about $325 million in restructuring costs for the Sun integration, so this is a significant increase.
Oracle (ORCL) refuses to say how just many employees will lose their jobs in this latest round of the cuts, but it’s safe to say the number will be significant, judging by the size of the restructuring charge it plans to take. Prior to the close of its acquisition by Oracle, Sun sacked 3,000 employees, about 10 percent of its global workforce, and took a restructuring charge of $75 million to $125 million.
The new restructuring charges Oracle just announced are nearly seven times that figure. And while it’s impossible to accurately extrapolate the number of jobs to be eliminated this time around from that earlier figure, it’s easy enough to see that it’s going to be a large one.