January 14, 2005 7:46 AM PST

Oracle to PeopleSoft: The pink slip's in the mail

Oracle appears to be adding insult to injury in its merger with PeopleSoft--taking the unusual step of notifying workers of their termination by sending pinks slips via express mail to their homes.

As earlier reported, shipments to thousands of PeopleSoft employees across the country are expected over the weekend, according to sources close to the company. Those spared pink slips will get packages too--containing new Oracle employment contracts.

That makes it a nail-biting weekend for many PeopleSoft employees, who number more than 11,000 worldwide. Oracle may cut as many as 6,000 jobs, according to its own earlier estimates. It plans to announce the official number Friday.

"The view of most of the employees out there is that it's a really callous way to do it," said Joe Davis, chief executive of Coremetrics and a former group vice president at PeopleSoft, who stays in touch with his former co-workers.

"They view it as just another in a series of steps where they feel like they're not being treated in a very humane way," Davis said.

An Oracle representative did not return repeated calls for comment.

As the hour for Oracle's announcement drew closer on Friday, Internet outlets gave shareholders and spectators a chance to vent about layoffs--both those that are imminent and those that may be yet to come.

"Don't kid yourself into thinking that there won't be another big one (layoff announcement) just prior to fiscal year end close in May," wrote a contributor to the Yahoo Finance message board under the moniker of synchronizemkgman.

Oracle's acquisition of PeopleSoft, completed just last week, has been particularly rancorous. PeopleSoft fought the deal for more than 18 months in a bitter battle marked by two court struggles and public vows by Oracle Chief Executive Larry Ellison to shut down PeopleSoft and discontinue its products.

The high-tech community is still recovering from the trauma of widespread layoffs that began five years ago with the bursting of the dot-com bubble. Since the beginning of 2001, more than 1.5 million jobs have disappeared from the industry, according to employment services firm Challenger, Gray & Christmas.

Even as the number of layoffs fell last year, the technology sector remains volatile, the firm said. Job losses in the sector exceeded 176,000 in 2004, with telecommunications workers hit hardest.

In the software business, Oracle's acquisition of PeopleSoft is generally seen as a sign of coming consolidation among other companies--which could bring its own wave of job cuts.

When it comes to cutting jobs, Oracle's layoff method is in particularly poor form, several human resources professionals said.

"It's very dehumanizing when you receive a letter in the mail and you have no one to respond to you," said Zarin E. Randeria, an independent executive coach and human resources consultant in San Francisco.

Others noted that the approach could backfire on Oracle, which needs to retain some PeopleSoft talent to pull off the merger.

"It's not to their benefit to come in and intimidate and antagonize the new work force," said John Challenger, chief executive of Challenger, Gray & Christmas. "You're trying to integrate work forces and prevent a we-they attitude among new employees. Many people getting these notices may feel it was impersonal and heavy-handed."

One News.com reader expressed a similar sentiment, saying he expects the fallout from the layoffs to take a toll on employees who keep their jobs. "As far as the employees that remain I would expect resentment to be high and productivity to be low," Michael Garfein wrote.

One critical comment posted on the Internet summed up the proceedings in a very few words.

"It's very efficient but pretty cold," said one anonymous commentator on a Yahoo Finance message board.

11 comments

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Business is Business
In today's business world the act of letting employee's go as the
result of a merger or aquasition is common-place. One of the
key aspects of business is also MONEY, for those of you that
forgot why they started there own business!

The act of sending out "Pink Slips" via express mail is just
another way that Oracle has chose to save money in leu of
layoffs. Think of the flip-slide if you will-- Oracle could give
everybody a fat ass compensation check with there pink slip
's. But then in restrospect they would also have to lay off another
4000+ just to make up the compensation checks.

So with that said, the 4000 extra people that didn't get laid off
should still be happy there with a company like Oracle. The
other 6000 that just got layed off should try to understand the
business aspect of this deal and not the personal aspect.

My advice to all that have been laid off is: do like the rest of the
Tech community does, dust off your resume's and look for
another job. Enough Said!

J Gund
Tech01.net
Posted by (4 comments )
Reply Link Flag
This isn't about cost savings
The decision to send the lay-off notices via courrier isn't a cost saver. All it is doing is keeping Oracle's management from having to look at the PeopleSoft employees as people. It was announced a while ago that the standard severance for all laid off employees is going to be 12 weeks pay plus health care coverage:

<a class="jive-link-external" href="http://news.cbsi.com/PeopleSoft+sweetens+severance+packages/2100-1014_3-5373485.html" target="_newWindow">http://news.cbsi.com/PeopleSoft+sweetens+severance+packages/2100-1014_3-5373485.html</a>

So, your logic is flawed. The move isn't to save money. It's actually costing a substantial amount MORE to sent the notices to employees rather than meet with them. Since every PeoplSoft employee is getting one of these, the cost could be anywhere from $150,000 up to $300,000 (based on published, next-day rates for 1 pound packages).

I don't think anyone is claiming the layoffs isn't a part of "business". It's about the apparent lack of professional compassion, if there is such a thing. While layoffs are never easy, making people sit and wait for a delivery truck to show up on Saturday in order to learn your professional fate is somewhat sick and twisted.

I think Ellison likes to think of himself as another Richard Branson, daring and bold. I would wager, however, that Branson would have the guts to face the outgoing employees. Larry can't say the same thing.
Posted by (1 comment )
Link Flag
Money money
Before money there's humans my friend... If money go first in your world, I don't want to be a part of it ;)
Posted by (6 comments )
Link Flag
yes, and no
I have no problem with the way they're doing things. Sending in the mail seems more efficient, and either way, people won't take it well. The only thing I would have suggested, is that they could have arrived on the friday prior the weekend. Don't ruin their weekend having them sit by the mailbox waiting. If you're going to fire someone... keep in during the work week.
Posted by mortis9 (370 comments )
Reply Link Flag
Ellison's People Skills
Regardless, the quality of the products, like the above people commented, People Soft's remaining people will have zero morale and the best will find jobs elsewhere, leading to a trashed company, which is what Oracle's leader wanted in the first place.

It would really be a testamony of free enterprise and consumer's voting for the way they want to be treated and expect their source to treat it's own staff, if not just People Soft's customers, but all of Oracle's customer's would begin migrating to a source that treated it's employees and clients as human beings. This was not about being profitable or business survival, but the personal attitude of a life-long tyrant and what other countries would try to focus on what's bad in a free Democratic Society. Fortunately, even though they make alot of noise and get alot of attention, the Oracles, Enron's, etc. really make up an extremely small # of total businesses in America.

Any time you read about Mr Ellison, makes you feel the need to read about the heroics and generosity of some of the surviving business executives from the Twin Towers. This guy will never understand what Bill Gates means when he talks about responsibility to your his stack of billions for the good of society.
Posted by Bil Fulton (1 comment )
Reply Link Flag
I imagine a lot of PeopleSoft customers would love to...
go a different direction than Oracle in the future (if not for the social reasons you mentioned, then because Oracle is an inferior product and will be more expensive in all likelihood)... but unfortunately the justice department was right, there really aren't any alternatives (other than SAP, and that's even worse in more ways than I care to get into).

The market is ripe for a new competitor because neither of the ones left are exactly engenedering customer happiness.
Posted by (20 comments )
Link Flag
Oracle is just another example of a bad company
Oracle is just another example of a bad company similar to HP, Compaq, SBC funny how how all the bad companies are IT companies it shows how computer people severly like management and people skills. If one of those laid off employees goes deranged and gun happy I will cheer him on.
Posted by cpudrewfl (56 comments )
Reply Link Flag
bad business
This is just about the worst way to do layoffs.
While layoffs are never pleasant finding out your employment status via mail is about as dehumanizing as it gets. I know about layoffs. There have been several rounds of them in my company over the past 2 years. At least here you're called into a conference room where they let you know that you're being laid off and the HR people are right there to tell you about your severence package, job search options,...etc....
So, which would you prefer?

I would think that a lot of Oracle's competitors are going to have a lot of success snatching top peoplesoft talent as a result of this bad move. I am also quite sure that companies are looking to sign up with other vendors to maintain what they have until they can make a switch from peoplesoft products. After all, if you're a peoplesoft customer how could you possibly trust the support you'd get from Oracle after a stunt like this.
Posted by mgarfein (12 comments )
Reply Link Flag
trust the support
<a class="jive-link-external" href="http://www.analogstereo.com/vauxhall_signum_owners_manual.htm" target="_newWindow">http://www.analogstereo.com/vauxhall_signum_owners_manual.htm</a>
Posted by Al Johnsons (157 comments )
Link Flag
LinkedIn
I read that thousands of PeopleSoft employees were going to LinkedIn

How is it possible that LinkedIn has enough work for thousands???

-----------------------
More talk at <a class="jive-link-external" href="http://loudboard.com" target="_newWindow">http://loudboard.com</a>
Posted by (8 comments )
Reply Link Flag
 

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