Oracle trims hundreds of jobs in Santa Clara

Database giant is expected to reduce workforce by about 2,500 worldwide in effort to bolster cloud services

SANTA CLARA >> Oracle has chopped several hundred jobs worldwide, including more than 900 in Santa Clara, according to official filings with state labor officials provided Tuesday to this news organization.

“We decline comment,” Oracle spokeswoman Jessica Moore said Tuesday.

Redwood City-based Oracle slashed the jobs in the company’s hardware and Solaris operating system organizations, notices filed with the state’s Employment Development Department showed.

“A reduction in force is taking place at the Santa Clara facility,” Oracle said in a Sept. 1 letter to the EDD. “However, the Santa Clara facility is not closing as part of this reduction in force.”

The WARN notice that Oracle sent to the EDD stated that 983 jobs were being cut in Santa Clara.

The hardest hit Santa Clara group, according this news organization’s review of the WARN notice, was in the hardware area, where about 615 jobs were lost.

According to posts on thelayoff.com, as many as 2,500 Oracle employees were affected worldwide by the job cuts. In addition to Santa Clara, Oracle cut positions in San Diego, Austin, Texas, Massachusetts, Colorado and India.

The terminations are to take effect Oct. 31, according to Oracle’s EDD letter.

While not commenting directly on the layoffs, Brad Zelnick, an analyst with investment firm Credit Suisse, issued a research note Tuesday that indicated Oracle’s big upside lay in cloud-based services. That sort of upside would be consistent with terminations in hardware and other positions.

“The cloud enterprise resource planning opportunity is just now heating up, and Oracle is in the pole position,” Zelnick wrote in the research note. “Our field work suggests Oracle has the leading cloud product in the largest of app software categories.”

Credit Suisse rated Oracle stock as a market-outperform and set a price target of $62. In late-session trades on Tuesday, Oracle shares were up 0.5 percent.

“We believe the market under-appreciates the staying power of Oracle’s technology stack and upside opportunities in the cloud, Zelnick wrote in the note.

Other experts agreed that it makes sense for Oracle to focus more resources on cloud technologies for its customers.

“Oracle is evolving more and more toward the cloud,” said Tim Bajarin, principal analyst with Campbellbased Creative Strategies. “When Oracle bought Sun Microsystems, Sun was primarily a workstation company.”

But the workstation demand faded as new technologies became dominant, including software on demand and software as a service offerings.

“The cloud is the future for technology companies,” Bajarin said.

The positions affected included workers in hardware development, software development, product development, and managers in the operations, Oracle reported to the EDD.

“The elimination of these positions is permanent,” Oracle stated.

The company stated it would do all that it could to assist displaced employees.

“Oracle is prepared to work with state and local government agencies to assist its employees during this time of transition,” Oracle said.