Oracle's internal reorganization is showing no signs of wrapping up four months after it started, causing lingering unease and uncertainty throughout the tech giant's global operations. According to people Business Insider has talked to, some job offers in the UK were revoked at the last minute amid a hiring freeze that may or may not be in effect.
The internal reorg began in the spring and has involved thousands of layoffs between March and this month. The company acknowledged the layoffs but hasn't given a total tally. Executives have not discussed the situation publicly.
From the half a dozen people Business Insider has talked to over the past few months about the reorg, one word comes to mind: endless.
For instance, we've heard from two people in the UK who had excitedly accepted job offers from Oracle, filled out the final paperwork, and waited a month to get their start date, only to be told instead that the offers were revoked. Both people told us that the reason given for the revoked offer was a hiring freeze in the UK.
One of the job offers was revoked in March, right before the company launched its first big layoff, that person told us. The other job offer was revoked earlier this month and that person was told the freeze would last for another three months.
All of the people we've talked to about the reorg since we first began reporting on it in March have worked for some of Oracle's fastest growing or most critical areas.
This includes its cloud infrastructure units, the Oracle Marketing Cloud (its competitor to Salesforce) and even its Adaptive Intelligence Apps, which are Oracle's artificial intelligence/machine-learning apps.
When we asked Oracle about a hiring freeze in the UK, the company told us it is hiring people globally, including in its cloud unit, known as Oracle Cloud Infrastructure Generation 2 (OCI Gen2).
"Every year Oracle hires tens of thousands of employees and we are currently hiring globally and in every line of business, including OCI Gen2," an Oracle spokesperson said. "Enabling our customers' success has always been a top priority for Oracle. We are laser-focused on delivering the best cloud products that drive efficiencies, fuel innovation and impact the bottom line for our customers around the world."
Another person we talked to, this one in the US, told us that there was also a US hiring freeze for some units that began in February, affecting organizations like sales. While those units may be hiring again, this person said that the freeze also sidelined promotions.
A harsh situation
Oracle needs to get its workforce in shape so that it can survive in this new age of cloud computing, in which it's late to the game and playing catch up to cloud giant Amazon Web Serivces. Cloud has radically changed how Oracle's customers buy their tech. And cloud giant Amazon Web Services is on a warpath, trying to steal Oracle's customers.
Still, we can't help but feel empathy for the people who thought they had landed a role with the database giant only to be left jobless.
"I feel used and shamefully treated," one of the would-be employees told us. "I am not an aggrieved former employee but an individual contributor hired in an apparent growth area of business. And I never managed to start my position."
$432 million for restructuring costs
Oracle execs may say something more about the restructuring on Wednesday, June 19, when the company reports its fiscal fourth quarter earnings.
Q4 is always the most important earnings report for Oracle. The fourth quarter is when sales reps push to close deals to make their annual quotas. Analysts are expecting Oracle to report a modest year-over-year decline in sales for the quarter (-2%) and the year (-1%), according to Yahoo Finance.
Even if execs don't give more details on who, what, and why they are restructuring, Oracle will likely include an updated disclosure on how much it has spent on its formal Fiscal 2019 Oracle Restructuring Plan.
When it reported third-quarter results in March, the company said it expected to spend $432 million total on this restructuring, primarily on employee severance, and at that point, it still had about 1/3 of that money left to spend. It said it planned to spend the rest through the end of fiscal 2020, which ends in May, 2020.
It's impossible to extrapolate how many jobs will be slashed based on $432 million in expenses, but the company did show that its cloud and software license is getting the brunt of it, accounting for $230 million.
Just for the heck of it, if each laid-off employee were to receive a generous $50,000 in severance (26 weeks of a $100,000 annual salary), $432 million would cover 8,640 jobs (assuming no other factors like benefits, bonuses and vacation pay). Oracle says it employs 138,620, so, at our $50,000 payout, that's enough to cover 6% of the workforce.
Some employees are happy, others are wary
Given how many months this restructuring has been going on, employees remain wary, according to chatter on anonymous chat app Blind, which an Oracle employee shared with Business Insider.
The gossip internally is that the new cloud group based in Seattle won't generally pay as well as it had in previous years, when it was a skunkworks team trying to lure talent from Amazon and Microsoft.
The Seattle team has now become the main Oracle cloud engineering unit and their product is replacing the company's original cloud.
But as important as the Seattle team is to the success of the company, they weren't spared from layoffs. According to employees we talked to at that office, as many of as 300 of them were laid off in March.
Some people believe more cuts will come to the unit, too, according to posts on Blind by Oracle employees.
There are also employees on Blind who say they are happy with their jobs, their pay and the cloud products that their teams are building.
And there are others who say they joined recently, two months ago, indicating that whatever hiring freeze that may have hit the US earlier this year is now over.
More about Oracle's cloud and restructuring
- As Oracle's growth stagnates, insiders say that its all-important cloud business has suffered layoffs, infighting, and confusion
- Top execs at longtime rivals Microsoft and Oracle explain why they just came out of nowhere with a new cloud partnership: 'This is the start of a beautiful friendship'
- The exec behind Amazon Web Services' fastest-growing product of all time says that it 'feels great' to be taking on Oracle head-to-head in the database market
- A laid-off Oracle cloud developer says there's been a power struggle between Oracle's Seattle and Silicon Valley offices — and Seattle won
- Oracle quietly held a round of layoffs this week
Are you an Oracle insider with insight to share? We want to hear it. jbort@jkmperu.com, DM @Julie188 on Twitter, or send me a text via Signal.
