Oracle to PeopleSoft: The pink slip's in the mail

Thousands of PeopleSoft workers await termination letters via express mail--a cold and unusual way to handle layoffs, experts say.

Alorie Gilbert Staff Writer, CNET News.com
Alorie Gilbert
writes about software, spy chips and the high-tech workplace.
Alorie Gilbert
3 min read
Oracle appears to be adding insult to injury in its merger with PeopleSoft--taking the unusual step of notifying workers of their termination by sending pinks slips via express mail to their homes.

As earlier reported, shipments to thousands of PeopleSoft employees across the country are expected over the weekend, according to sources close to the company. Those spared pink slips will get packages too--containing new Oracle employment contracts.

That makes it a nail-biting weekend for many PeopleSoft employees, who number more than 11,000 worldwide. Oracle may cut as many as 6,000 jobs, according to its own earlier estimates. It plans to announce the official number Friday.

"The view of most of the employees out there is that it's a really callous way to do it," said Joe Davis, chief executive of Coremetrics and a former group vice president at PeopleSoft, who stays in touch with his former co-workers.

"They view it as just another in a series of steps where they feel like they're not being treated in a very humane way," Davis said.

An Oracle representative did not return repeated calls for comment.

As the hour for Oracle's announcement drew closer on Friday, Internet outlets gave shareholders and spectators a chance to vent about layoffs--both those that are imminent and those that may be yet to come.

"Don't kid yourself into thinking that there won't be another big one (layoff announcement) just prior to fiscal year end close in May," wrote a contributor to the Yahoo Finance message board under the moniker of synchronizemkgman.

Oracle's acquisition of PeopleSoft, completed just last week, has been particularly rancorous. PeopleSoft fought the deal for more than 18 months in a bitter battle marked by two court struggles and public vows by Oracle Chief Executive Larry Ellison to shut down PeopleSoft and discontinue its products.

The high-tech community is still recovering from the trauma of widespread layoffs that began five years ago with the bursting of the dot-com bubble. Since the beginning of 2001, more than 1.5 million jobs have disappeared from the industry, according to employment services firm Challenger, Gray & Christmas.

Even as the number of layoffs fell last year, the technology sector remains volatile, the firm said. Job losses in the sector exceeded 176,000 in 2004, with telecommunications workers hit hardest.

In the software business, Oracle's acquisition of PeopleSoft is generally seen as a sign of coming consolidation among other companies--which could bring its own wave of job cuts.

When it comes to cutting jobs, Oracle's layoff method is in particularly poor form, several human resources professionals said.

"It's very dehumanizing when you receive a letter in the mail and you have no one to respond to you," said Zarin E. Randeria, an independent executive coach and human resources consultant in San Francisco.

Others noted that the approach could backfire on Oracle, which needs to retain some PeopleSoft talent to pull off the merger.

"It's not to their benefit to come in and intimidate and antagonize the new work force," said John Challenger, chief executive of Challenger, Gray & Christmas. "You're trying to integrate work forces and prevent a we-they attitude among new employees. Many people getting these notices may feel it was impersonal and heavy-handed."

One News.com reader expressed a similar sentiment, saying he expects the fallout from the layoffs to take a toll on employees who keep their jobs. "As far as the employees that remain I would expect resentment to be high and productivity to be low," Michael Garfein wrote.

One critical comment posted on the Internet summed up the proceedings in a very few words.

"It's very efficient but pretty cold," said one anonymous commentator on a Yahoo Finance message board.