ORCL axing 2% of workforce

CEO ties beginning of company's demise to the initial purchase of ORCL stock by J Perry Fecteau, a company-wrecker in an obscure Usenet stock group.

"He apparently is intent on doing to us what he did to PSIX", a tired-looking Ellison said in an after-hours interview after release of the news.

bluevelv

Tuesday March 20, 4:25 pm Eastern Time

Oracle to Cut Up to 2 Percent of Staff

By Lisa Baertlein

PALO ALTO (Reuters) - Oracle Corp. (NasdaqNM:ORCL - news), the world's second-largest software maker, on Tuesday said it would cut up to 866 jobs, or 2 percent of
its work force, to trim spending amid a slowing economy.

Oracle shares lost $1-1/16, or 6.88 percent, to end at $14-3/8 after the software giant said
it would join other high-tech, Silicon Valley, Calif.-based companies in paring job rolls,
though not to the same degree.

Chip giant Intel Corp. (NasdaqNM:INTC - news) already has announced plans to cut its
work force by 5,000 and Cisco Systems Inc. (NasdaqNM:CSCO - news) also has said it
will reduce staff.

``Based on current business conditions, at this time the company
expects to reduce our
worldwide work force by approximately 1 to 2 percent through normal attrition and regular
business performance assessments,'' said Stacey Torman, an Oracle spokeswoman.

The announcement doesn't come as a huge surprise, however.

When Oracle, the biggest maker of database software, reported fiscal third-quarter results
on March 15, Chairman and Chief Executive Larry Ellison said on a conference call that ``by
and large, with the exception of R&D, Oracle should consistently be reducing head count in
virtually every area.''

Ellison, along with other chief executives, said he expected things to get a bit worse before
they get better. ``We're assuming that the economy gets a little worse in Q4 than Q3,'' Ellison
said. ``What the economy does, we'll do.''

That remark appeared to fuel Oracle layoff rumors, which have been smoldering in Silicon
Valley for more than a month.

``It's a lot less than what was rumored. Rumors were flying about 10
percent (cuts),'' said
Mark Verbeck, senior analyst at Epoch Partners in San Francisco, who saw a silver lining in
Tuesday's announcement.

``In an environment of rapid growth, companies have a hard time
getting rid of people that aren't performing well because they need the bodies. When this happens, it gives companies an opportunity to clean house,'' he said.

GIANTS STILL LOOKING FOR REBOUND Many in the high-tech industry were looking for a rebound in demand in the second half of 2001 only a month ago but now even such bellwethers as Dell Computer Corp. (NasdaqNM:DELL - news) have said they won't make any demand forecasts for the rest of the year due to the continuing economic uncertainty.

Also on Tuesday, the Federal Reserve cut the overnight bank lending rate by half a percentage point to 5 percent -- its lowest level since mid-1999 and the third such cut this year. The Fed, in making the move, said that excess capacity in the U.S. economy may last for ``some time.''

Banks will soon trim their own rates for mortgages and the like and the overall cost of borrowing money will decrease, with the hope that it will stimulate demand and, in turn, the economy. But such rate cuts typically take six months or more to ripple through the U.S. economy.

Redwood Shores, Calif.-based Oracle employs about 43,300 workers.

Applied Materials Inc. (NasdaqNM:AMAT - news), the biggest producer of chip-making equipment, said on March 15 that it, too, planned to cut its work force, by 4.5 percent, to lower costs, through what it called a ``voluntary separation plan.''

San Jose, Calif.-based Cisco, the biggest maker of computer networking gear, said two weeks ago it planned to cut its work force by as much as 11 percent, or 5,000, of its 44,000 workers. Mobile phone maker and chipmaker Motorola Inc. (NYSE:MOT - news) is cutting 7,000 more jobs, bringing the total headcount reduction in its cell phone unit to 12,000. Received on Tue Mar 20 2001 - 17:16:12 CST