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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."
Also, how do you produce "hard evidence that there were no competition problems"?
Point out the existence of Postgres?
I don't even know why Sun paid a billion for it in the first place. IIRC, most of the original people behind it have left and started their own companies around mysql open source forks, or gone to other projects. The supposed "ownership" Oracle will have seems mostly worthless. If they were rational they would have jettisoned MySQL at the first sign of EU resistance.
That said, I have little sympathy for the EU here. They're taking hundreds of millions of dollars out of Oracle/Sun's coffers due to the delays, then turning around and saying that the burden is on Oracle to prove it's innocence. If the EU is going to be so disruptive to businesses, they need to act quickly and with their own resources. I'm no fan of corporations, but the EU looks to be clearly in the wrong here.
They both operate in Europe as well. When you're a large, multinational corporation you generally have to accept regulatory practices of each nation you wish to operate in.
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?
Presumably Oracle and Sun would be welcome to merge if they had terminated their entire presence in Europe - they're not proposing doing that and one assumes it's because Europe is a big enough financial interest for them that they believe it's *worth the wait*. They may not have a choice, in practical terms, but one assumes they have years / decades of making money from their European dealings so it's not like the EU is just a plain dead weight for them.
This is the same EU that is cracking down on anticompetitive behaviour from MS and Intel, which generally seem to be popular moves with folks here. Would the tech industry really be in a better position if they reduced their scrutiny? Or if they applied it only to certain companies.
To me it seems a bit "convenient" that, in an economy where many jobs have to be lost anyhow (and as a merger is occurring, which may also naturally lead to job losses) people are blaming job losses solely on the regulators doing their jobs and not on sharp practice, opportunism or plain lack of co-operation from large multinationals operating in a cutthroat market.
To prevent a large monopoly from forming around a certain product, service or market? Seems like a good enough reason to me. Monopolies only benefit themselves (the companies that create them) and not consumers. In the EU, at least the government still cares about protecting the consumer. In the US, the companies run the show and the politicians.
Oh, nonsense. An organization the size of Oracle had to know that a merger like this would attract regulatory scrutiny. Every single news story about this has brought up that regulators would be looking at this one carefully. This shouldn't be a surprise that it's getting attention. Also, anyone who's paid attention to the Microsoft battles with the EU should have been aware they the EU competition regulators are much stricter than the US regulators.
Basically, for Oracle to pull this deal, they had a responsibility (I'll even go so far as to call it a fiduciary duty, since it's apparently costing them lots of money) to be ready for this scrutiny. This story seems to indicate that they weren't.
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.
Read TFA more carefully! What Sun ACTUALLY has said is that the cuts are already part of a 1 year plan. Their complaint is that by holding up the deal, the EU is delaying FURTHER CUTS that they can't make until they are sure there will be Oracle personnel to fill those roles.
That is, they really wish the EU would hurry up and OK the deal so they can fire more people faster.
Other than that, Sun's problems are related to the delays in the deal only by coincidence.
The EU has listed specific concerns and is perfectly happy to move the process forward as soon as Oracle addresses them. It has not done so. Yesterday, right here on /. we read one suggestion (spin off MySQL) that would certainly take care of it.
As for U.S. regulators, it's no surprise they've already OKed it. They'll crack the sound barrier getting the rubber stamp out if your market cap is big enough.
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.