Oracle is mostly firing employees from its hardware division
According to a letter sent to the Employment Development Department, Oracle is laying off approximately 450 employees in its Santa Clara hardware systems division, reports the Mercury News. Similarly, about 1,800 employees company-wise are being pink-slipped, claims the reports at The Layoff, a discussion board for technology business firings.
The layoff news comes after the US Department of Labor (DOL) filed a lawsuit against Oracle in January. The DOL alleged that Oracle was involved in pay discrimination practices against African-American, female, and Asian employees.
Oracle spokesperson Deborah Hellinger replied on the issue that “The complaint is politically motivated, based on false allegations, and wholly without merit.”
However, the move is made by the Redmond giant as it is shifting away from its traditional software and hardware products and moving towards the cloud, which is its new revenue hope.
“The Santa Clara facility is not closing as part of this reduction in force,” the company wrote last Wednesday. “Rather, Oracle is refocusing its Hardware Systems business, and for that reason, has decided to lay off certain of its employees in the Hardware Systems Division.”
The employees included on the firing list are hardware and software developers, along with a handful of managers, technicians and administrative assistants. Rumors of layoffs had been swirling for a while that SPARC and its Unix operating system Solaris were on the chopping block.
Oracle’s revenue from hardware products has fallen 13 percent in September through November of 2016 compared to the same time period year before, according to the company’s most recent quarterly earnings report. Its revenue from new software licensing revenue plummeted by 20 percent in its last quarter ending December 2015. Oracle also apparently has axed plans to release the next major version of its Solaris operating system, Ars Technica reported.
In response to decreasing software and hardware revenue, Oracle has pivoted, building data centers, offering cloud services to companies and selling software that is rented over the internet instead of bought in a box. According to its latest earnings report, revenue from the company’s cloud software as a service and platform as a service has increased to 81 percent.
“This year we are selling more enterprise SaaS (software as a service) than any cloud services provider in the world,” Oracle co-CEO Mark Hurd wrote in a December news release announcing the earnings. “We expect to book over $2 billion in new annually recurring cloud business this year alone.”