Two days after Chief Executive Larry Ellison said the company wouldn'tbroad layoffs, analysts continue to cite sources who indicate that the company is at least pruning jobs.
Credit Suisse First Boston analyst George Gilbert said in a research note Friday that Oracle is cutting about 1 percent to 2 percent of its work force, or roughly 400 to 800 employees. Oracle has about 40,000 employees.
According to Gilbert, who cited "industry sources," the layoff process began late last week. "Primary cuts are centered in CRM (customer relationship management) software development with additional reductions primarily in sales and marketing," Gilbert said.
"These cuts do not surprise us, given Oracle's limited traction in CRM and the need to resize the heavy investment," he added.
In response to Gilbert's report, an Oracle representative denied there were layoffs. OracleMonday that the company did cut 200 employees from its development staff, but indicated there weren't any more cuts.
Credit Suisse First Boston said it was standing by its report.
The Oracle representative also took issue with Gilbert's take on Oracle's CRM business, adding the company "continues to aggressively support" CRM and sees it as a key way to grow.
Gilbert said Oracle's 400 to 800 job cuts would equate to $48 million to $95 million in cost savings. Gilbert added that Oracle is cutting its work force to save $100 million and hit its earnings targets for 2003.
The Gilbert report could set up an interesting earnings conference call June 18. Ellison on Wednesday said financial analysts were "irresponsible" for speculating that the company would miss estimates.
"They're wildly irresponsible (with the stock market) on the way up. Now they're being wildly irresponsible on the way down," he said.
Ellison said the company would at leastanalysts' predictions for a profit of 12 cents per share on revenue of $2.6 billion for its fourth quarter, which ended May 31.
Ellison's comments gave Oracle's beleaguered stock a quick boost, but those gains evaporated Thursday after analysts said the company's announcement was short on specifics. Oracle has also been caught in a controversy over awith the state of California and has been facing stiffer competition from IBM and Microsoft.
Morgan Stanley analyst Charles Phillips said investors are taking Ellison's comments to mean that Oracle's sales are improving. Ellison's confidence about its fourth quarter may mean little for the company's license sales, Phillips said.
News.com's Wylie Wong contributed to this report.