Sun Microsystems To Cut 3,000 Jobs As Oracle Deal Drags On

afgun writes with news that Sun will be shedding 3,000 jobs, roughly 10% of their workforce, as they continue to lose money while waiting for EC regulators to approve their acquisition by Oracle. "Oracle Chief Executive Officer Larry Ellison said Sept. 22 that Sun is losing about $100 million a month as the transaction is delayed by the EU probe." James Staten, an analyst with Forrester, said, "The longer a cloud of uncertainty hangs over Sun, that drives customers into delays of purchases or into the hands of competitors. This is a very trying time for Sun and Oracle as they wait for an answer." A spokesman for EU Competition Comissioner Neelie Kroes said today that she "expressed her disappointment that Oracle failed to produce, despite repeated requests, either hard evidence that there were no competition problems or a proposal for a remedy to the competition concerns identified by the commission," and that "a rapid solution lies in Oracle's hands."

Comments

Re:Did the US regulators have the same concerns?

[RogerWilco]

Did the US regulators have similar concerns? If not, why not? If they're genuine concerns - they sound like it - why is it just the EU that's following them up?

There generally seems to be a certain amount of frustration that the EU is holding up companies of US origin, although actually they have significant financial impact (and offices and presumably regional headquarters and subsidiary companies) in Europe too. Presumably Oracle and Sun *themselves* could have predicted these hurdles if they'd done their homework - is it really that outlandish to expect that merging two leading (albeit in different markets!) database companies would be a worry for the regulators?

I was wondering this too. What I've seen so far of Neelie Kroes in the last couple of years, she's been very fair, and quick to act if she could. It's only when companies are dragging their feet and fail to reply to the raised concerns that get raised. And she might have given some big fines to US companies, the biggest and most fines have still been applied against EU companies.

And given that Oracle is acquiring MySQL with this merger, I think the EU certainly has a point, the only other sizeable players remaining are PosGreSQL and Microsoft. Basically you end up with a market that looks similar to the OS market with Linux and OSX as competitors to Windows, and for the OS market I think Windows has been ruled a (near) monopoly on both sides of the Atlantic. I think the EU is well within its rights if it wants to prevent the situation that the current OS market is in.

Ellison

[TopSpin]

Larry doesn't mind; the EU delay gives him a scapegoat for the layoffs.

Those of you fixated on MySQL: Sun sells hardware, software licenses and contract support to enterprises that use SQL Server, DB2, SAP and other direct competitors of Oracle, meaning the some DB2 users (for instance) will find themselves relying on Oracle for support of certified DB2 platforms... MySQL may be the least of whatever "competition problems" the EU has in mind

Re:Since it is EU that is dragging

[samschof]

Not quite. In the U.S. the primary concern of anti-trust review for mergers and acquisitions is if it benefits or harms the consumer. In the EU, the primary concern is if the merger adversely impacts competition in the market. The failed acquisition of Honeywell by GE was blocked by the EU after being approved by the U.S. The U.S. review stated that bundling of avionics and engines, with some oversight of aircraft leasing by GE would reduce costs for aircraft and, as such, would not harm the consumer. The EU ruled that the merger would provide GE an unfair advantage against European jet engine manufacturers and blocked it.

Re:I must be missing something

[Life2Short]

What do these companies do with all of these employees? They had 30K and can cut 3K at the drop of a hat? Adobe has about 7K, Google 20K, Apple 32K, Microsoft 91K and IBM nearly 400K!! What do all of these people do? By way of comparison, Harvard has 13K and GM had about 245K. How many TPS reports do 10K employees generate?

Re:I must be missing something

[JumpDrive]

What the EU has been driving at is the assimilation of MySQL by Oracle.
Even as a Postgres user I'm willing to admit that MySQL is used in a much larger number of databases.
So the issue isn't that there is an alternative, it's that a significant number of people are using MySQL in production environments.
And believe it or not the EU considers that there is a serious amount of momentum for the end user if they are already using MySQL.
The concern they have is that MySQL would be abandoned by Oracle. Leaving a large number of people with concerns about what they are going to do for support.
If Oracle would spin MySQL or seperate MySQL from the deal, this thing would be over in a couple of days.
Currently what Oracle and Sun are saying is, if you don't let us have MySQL we are going to start laying people off and it's your fault.
. So now they are playing a game of chicken.
The only problem is that the EU usually takes into account these type of tactics and realizes that no matter what happens a large number of people are going to lose their jobs.
Here in the US congress would be crying about the job loss we were creating by not letting the deal go through.

I'm becoming a little more impressed with the EU's dealing with these types of issues. They seem to be a lot more business savvy compared to the counterparts in the US.

Re:MySQL isn't nearly worth the losses Sun is taki

[demachina]

Exactly right. Chances are Ellison is loving this since he can blame the carnage on the EU, he gets SUN to take all the charges for the layoffs, and he gets rid of people he would have fired the day after the merger closed anyway. Only interesting question is if Schwartz and SUN decided who got canned or if Ellison and Oracle are deciding. Chance are SUN at least consulted with Oracle on who got the ax.

Re:Aren't these both US companies?

[Tom]

Because they aren't "american companies". They are multinational corporations. They have offices and subsidaries in Europe and probably a dozen other places all around the world. Their HQs happen to be in the USA, but aside from that they're only "american" when appealing to patriotism serves their bottom line.