Why would Oracle (ORCL) lay people off?

Posted Jan 14th 2009 9:09AM by Douglas McIntyre
Filed under: Products and Services, Employees, Oracle Corp (ORCL), Recession

Oracle (NASDAQ: ORCL) is the most successful enterprise software company in the world. It is the largest and produces the most impressive earnings. Over the last several years, it has been remarkably successful at M&A, buying up a number of relatively large firms to round out what it can offer to business customers.

Oracle's revenue has also been growing steadily, which is not something all big software companies can say.

Yesterday, Oracle laid off 500 people, which is not a huge number for the company, but it is not a good sign. According to Reuters, "Redwood City, California-based Oracle laid off the employees on Friday, trimming its force of sales consultants who advise clients on how to integrate its business management software and database programs into their operations."

It is not a terribly original conclusion to say that if Oracle is downsizing, global IT spending is slowing. But, it also means that the critical marketing message from large software companies is not working--technology makes businesses more successful and efficient in a recession.

Enterprise software companies want clients to think that software can do the work of people, that productivity can come from a machine. The is apparently a hard sell. Who wants to spend money on technology when they could save a few hundred jobs instead?

Douglas A. McIntyre is an editor at 247wallst.com.

Tags: computers, inthenews, layoffs, ORCL, software, technology

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Reader Comments (Page 1 of 1)

1-14-2009 @ 11:11AM

BHarrison said...

The stark reality is that this is "just the beginning of what is to come for the next several years". Good companies are going to be put into bankruptcy due to the decline in economic activities overall. Microsoft needs to "retool" Windows XP; corporations do not have the funds to revamp their IT for totally new OS. The reality is that we need to trim back and conserve our operating expenses. With fewer employees, manufacturers are not going to be able to adapt to new OS or to upgrade existing IT systems. When companies are struggling to survive, they are NOT going to invest tremendous resources to modify their IT systems and software. The domino and trickle down impact of the economic melt down is spreading throughout our nation. Microsoft needs to continue to support Windows XP or they are going to create substantial problems in the market.