Layoffs seen in PeopleSoft merger
As the business software maker prepares to offer details about its acquisition of J.D. Edwards, it seems likely that one topic will be impending job cuts.
PeopleSoft CFO Kevin Parker has said that the business software maker plans to lay off between 800 and 1,300 employees as a result of the $1.8 billion acquisition, according to a story in Thursday's Wall Street Journal. Parker indicated that the layoffs would be made to reduce redundant operations between the companies, according to the report.
The combined companies, Parker said in the story, expect to have roughly 11,700 employees by the beginning of next year, down from the current total of 12,500. But based on numbers that the two companies reported for last year, the combined business would account for more than 13,200 employees before any layoffs, pushing the potential total job cuts to some 1,500.
A Peoplesoft representative declined to comment on the reported job cuts Thursday morning.
Industry watchers agreed that such a move would not be uncommon in a merger the size of the PeopleSoft-J.D. Edwards deal.
"PeopleSoft has been playing their hand very close to the vest on this one, but there are almost always opportunities to eliminate redundancies in a merger like this," said Tom Topolinski, an analyst for Gartner Dataquest. Any reductions should be modest, he said. "I would be surprised if this was a massive layoff."
The companies are expected to provide further details of the merger in a meeting Thursday with investment analysts in New York. Among the information expected to be offered at the meeting are how the two companies' products and services will be aligned once the two are brought together.
Last week, PeopleSoft announced that it had purchased all remaining shares of J.D. Edwards stock. PeopleSoft reported that it bought about 105 million shares of J.D. Edwards when it acquired the company on July 18. PeopleSoft will pay $7.05 in cash and 0.43 of a share for each remaining share that was not tendered in July.
Since PeopleSoft first announced the deal, and throughout its battle to fend off a hostile takeover by rival Oracle, CEO Craig Conway has remained publicly confident that the J.D. Edwards merger would be successful. Conway said the two companies have been moving rapidly to integrate operations.
The combination of the two enterprise software makers moves PeopleSoft past Oracle to take the No. 2 spot among business application providers behind SAP. PeopleSoft first announced its plans to acquire smaller business software maker J.D. Edwards in June.
CNET News.com's Martin LaMonica contributed to this report.