Oracle's NCI reorg sheds staff

Oracle subsidiary Network Computer Incorporated has quietly eliminated 21 positions and reassigned another 20 workers out of its 130-member workforce, citing a sales reorganization and its pending merger with Navio Communications, CNET's NEWS.COM has learned.

NCI chief executive Jerry Baker confirmed the reorganization today after rumors of the layoffs leaked out. "Over the past year, we haven't generated the revenue we had hoped for," he said. "But the real factor was the change in our sales model" and the merger with Navio. Founded last summer, NCI is the Oracle unit that was formed to provide software for the much-touted network computer. In May, NCI agreed to buy Netscape Communications' major equity stake in Navio for an undisclosed sum. The merged NCI and Navio will develop software for NCs and other non-PC appliances such as Internet TVs.

At the time, Oracle said it would take a $60 million charge in the merger. Oracle CEO Larry Ellison said the merger "is one more example of how we are turning this vision into a reality." The NC, he believes, will "dramatically change the way we work, play, educate our children," and stimulate the technology industry.

Baker noted the reorganization was announced internally earlier this month. The 21 positions that are being eliminated include 13 full-time and 8 temporary or contract workers, and most are expected to be reassigned within Oracle, he added. The other 20 workers are part of a database group that is being reassigned within Oracle.

Under the reorganization, NCI will rely on the likes of Oracle, Digital Equipment, and Siemens to sell software for the NC rather than assemble a direct sales force. The NCI-Navio merger is expected to close August 1, and the combined organization will be composed of 180 employees, Baker said.