Oracle Cuts Part of North American Workforce

The impact of our current economic crisis seems to be never ending as companies continue to announce cutbacks and lay offs. The latest to join this list is Oracle (News - Alert), the world’s third place software maker.

 

Reuters reported today that the company has fired what has been described as “several hundred” of its more than 86,000 workers. According to a Wall Street Journal report on Tuesday, the lay offs numbered around 500.

Based in Redwood City, California, Oracle made the move on Friday to let these employees go in an attempt to trim its sales consultant force. These professionals had been charged with advising clients on how to integrate Oracle business management software and database programs into their operations.

Although 500 is no small number in terms of lost jobs, investors feared the lay offs would be much greater. Rumors abounded last week that Oracle was preparing to lay off thousands of its workers. As the economic slump continues, there are no guarantees that the company is finished in its attempts to cut back.
It is reported that many companies in the software space are planning lay offs, some to a much larger degree. As the downward trend continues, it is likely that much of the software industry will be at risk for internal change. 

One such player making headlines is Seagate, a storage software company. It was reported earlier this week that the company plans to cut 10 percent of its U.S. workforce. Seagate reportedly filed its intensions with the Securities and Exchange Commission as it struggles with intense competition and sluggish sales.

The latest move by Oracle is sure to have an impact on its market performance. In December, the company posted revenue of $5.6 billion for the second quarter of fiscal 2009, representing a 5 percent increase. While this performance is strong, it is still below analysts’ estimates of $5.84 billion.

Looking ahead to results for the third quarter, Oracle issued earnings guidance between 31 cents and 33 cents. This projection is below analysts’ estimate of 34 cents. The company has reported that it expects its third quarter revenue to be between $5.43 billion and $5.59 billion, still short of the projected $5.84 billion.

 

This latest news out of such a powerful player demonstrates that this recession is hitting nearly all areas of industry. As companies continue to tighten to purse strings to settle in for the long haul, companies like Oracle and Seagate will struggle to create opportunities and realize additional revenue.