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Sun Microsystems To Cut 3,000 Jobs As Oracle Deal Drags On 251

Posted by Soulskill
from the don't-let-the-sun-go-down-on-me dept.
afgun writes with news that Sun will be shedding 3,000 jobs, roughly 10% of their workforce, as they continue to lose money while waiting for EC regulators to approve their acquisition by Oracle. "Oracle Chief Executive Officer Larry Ellison said Sept. 22 that Sun is losing about $100 million a month as the transaction is delayed by the EU probe." James Staten, an analyst with Forrester, said, "The longer a cloud of uncertainty hangs over Sun, that drives customers into delays of purchases or into the hands of competitors. This is a very trying time for Sun and Oracle as they wait for an answer." A spokesman for EU Competition Comissioner Neelie Kroes said today that she "expressed her disappointment that Oracle failed to produce, despite repeated requests, either hard evidence that there were no competition problems or a proposal for a remedy to the competition concerns identified by the commission," and that "a rapid solution lies in Oracle's hands."
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Sun Microsystems To Cut 3,000 Jobs As Oracle Deal Drags On

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  • by MobileTatsu-NJG (946591) on Wednesday October 21, 2009 @01:18PM (#29825369)

    "The longer a cloud of uncertainty hangs over Sun, that drives customers into delays of purchases or into the hands of competitors...

    I just don't see why Sun needed to use the cloud for uncertainty. Companies have been doing this for years without the cloud. Now they can't control it!

  • Nancy Kroes? (Score:5, Informative)

    by anomnomnomymous (1321267) on Wednesday October 21, 2009 @01:22PM (#29825457)
    Erm, she is called Neelie Kroes [wikipedia.org].
    • Erm, she is called Neelie Kroes.

      Man, I hated her on Star Trek:Voyager.

    • Re: (Score:2, Funny)

      by syousef (465911)

      Erm, she is called Neelie Kroes.

      Nancy is Neelie's hotter evil twin sister.

      • Re: (Score:3, Interesting)

        by dkf (304284)

        Erm, she is called Neelie Kroes.

        Nancy is Neelie's hotter evil twin sister.

        If you work for Opel in Germany (or sit on Magna's board) I don't think you'll be believing it is possible for someone like her to have an evil twin...

  • by AlXtreme (223728)

    EU Competition Comissioner Neelie Kroes

  • by Just Some Guy (3352) <kirk+slashdot@strauser.com> on Wednesday October 21, 2009 @01:24PM (#29825489) Homepage Journal

    I don't really get this. If you Oracle on Solaris is a good solution for you today, will it become a bad solution if the merger isn't approved?

    Also, how do you produce "hard evidence that there were no competition problems"? Tell them you looked really hard but couldn't find any counterevidence?

    I'm ambivalent about Sun and am definitely not an Oracle fan, but I don't really see the problems here.

    • by Timothy Brownawell (627747) <tbrownaw@prjek.net> on Wednesday October 21, 2009 @01:26PM (#29825537) Homepage Journal

      Also, how do you produce "hard evidence that there were no competition problems"?

      Point out the existence of Postgres?

      • I've been using MySQL for about ten years, mainly because I've become pretty durned familiar with it. However, all these antics and all this uncertainty is making PostgreSQL look considerably more attractive. To be honest with you I'm feeling that way about a lot of Sun's products. The uncertainty is making me uneasy about Java as well, and I sure the hell wouldn't do anything in OpenSolaris right now.

        • and I sure the hell wouldn't do anything in OpenSolaris right now

          Why the hell not?

          • Re: (Score:3, Informative)

            by Jason Earl (1894)

            Because, while OpenSolaris is pretty cool, support for OpenSolaris could easily disappear tomorrow. Yes, OpenSolaris might still exist, but future development on OpenSolaris is basically 100% dependent on Sun. If Oracle decides that it does not want to fund OpenSolaris development any more (or it simply decides to reduce funding for development) then OpenSolaris will be in serious trouble.

        • by rbanffy (584143)

          I moved to PostgreSQL long ago. For me it was subqueries and transactions that made PostgreSQL look very attractive.

          I would have no problem in doing stuff on OpenSolaris. Moving the kind of stuff I do to BSD, AIX, HP/UX, OSX or Linux is more or less trivial.

      • by JumpDrive (1437895) on Wednesday October 21, 2009 @02:49PM (#29826837)
        What the EU has been driving at is the assimilation of MySQL by Oracle.
        Even as a Postgres user I'm willing to admit that MySQL is used in a much larger number of databases.
        So the issue isn't that there is an alternative, it's that a significant number of people are using MySQL in production environments.
        And believe it or not the EU considers that there is a serious amount of momentum for the end user if they are already using MySQL.
        The concern they have is that MySQL would be abandoned by Oracle. Leaving a large number of people with concerns about what they are going to do for support.
        If Oracle would spin MySQL or seperate MySQL from the deal, this thing would be over in a couple of days.
        Currently what Oracle and Sun are saying is, if you don't let us have MySQL we are going to start laying people off and it's your fault.
        . So now they are playing a game of chicken.
        The only problem is that the EU usually takes into account these type of tactics and realizes that no matter what happens a large number of people are going to lose their jobs.
        Here in the US congress would be crying about the job loss we were creating by not letting the deal go through.

        I'm becoming a little more impressed with the EU's dealing with these types of issues. They seem to be a lot more business savvy compared to the counterparts in the US.
    • Re: (Score:3, Informative)

      by GameMaster (148118)

      If, by not merging, Sun goes out of business, then no more support for your newly purchased equipment. Of course, I don't have any idea how likely Sun is to go under, but that's what they're trying to allude to in pressuring the EU. As for counter evidence, just point to all the competing products/companies that will still exist in their markets after the merger.

    • by MrMarket (983874)
      It's not about Solaris. It's about MySQL [arstechnica.com]
      • Re: (Score:3, Interesting)

        Why is it not about Java also? MySQL is big but Java is bigger.
        • Re: (Score:3, Informative)

          by idontgno (624372)

          Because Oracle doesn't already offer a competing product in the same market space as Java, raising concerns about anticompetitive squashing or stifling of Java.

          OTOH, MySQL runs the perceived risk of being the fifth wheel in the "Oracle RDBMS über alles" mindset that much of the community fears (wrongly or rightly).

          On a slightly offtopic note: I wonder if this comment will preserve the umlaut-u I put into the quoted phrase there.

        • by Tanktalus (794810)

          Because Oracle doesn't have a competing VM, but does have a competing DB? (And even has a free DB that was a direct response to MySQL?)

        • by MrMarket (983874)
          Because the JAVA creator is not running interference as the ars article cites.
    • Re: (Score:3, Informative)

      by wsanders (114993)

      The problem is that the longer the decision is delayed the longer Sun's EU employees get to keep their jobs doing .... whatever it is they do.

      I dunno what Sun people do anymore. Every time I've called Sun for the last 5 or 6 years they seemed only vaguely interested in selling me a computer.

    • by gtall (79522) on Wednesday October 21, 2009 @02:17PM (#29826351)

      Wow, that's the first time I've seen Oracle used as a verb. You've been Oracled on must mean something like Larry has peed on your rose bushes (egads, not again). Solaris probably will get Oracled on.

    • by Life2Short (593815) on Wednesday October 21, 2009 @02:25PM (#29826483)
      What do these companies do with all of these employees? They had 30K and can cut 3K at the drop of a hat? Adobe has about 7K, Google 20K, Apple 32K, Microsoft 91K and IBM nearly 400K!! What do all of these people do? By way of comparison, Harvard has 13K and GM had about 245K. How many TPS reports do 10K employees generate?
      • by FooAtWFU (699187)
        Maybe they don't do all that much. If you've looked at the latest Bureau of Labor Statistics figures for 2009 2Q, worker productivity increased 6.4% [wsj.com] (annualized rate):

        Over the long run, productivity is key to improved living standards by spurring rising output, employment, incomes and asset values. While the jump in productivity could suggest that the economy is poised for a strong recovery once it reaches bottom, that could be offset by the negative impact on consumer demand from job losses.

        For the econo

        • "For the economy to recover, those people will end up having to find something else (productive) to do."

          It finally dawned on me why some conservatives refer to the rich as "the most productive individuals". Being productive is all about consuming resources and expending energy and who does that better than the wealthy?

    • by debrain (29228)

      Also, how do you produce "hard evidence that there were no competition problems"? Tell them you looked really hard but couldn't find any counterevidence?

      Sir-
      Cite existing studies, or alternatively commission a study by a market research / auditor like PWC or Deloitte of:

      1. the market effects of the merger upon the same types of products and services that are offered by both companies, which study ought to (if the merger is to be approved) indicate that there is a limited impact upon the competition in all of the significant types of products and services where both these companies presently provide products and services in the marketplace; and

      2. the ability for the merged company to exclude the products and services of other companies now that the two have merged, and the likelihood and market effects of that possibility of exclusion; which study ought to (again, if the merger is to be approved) indicate that there is a limited likelihood or impact upon competition because the company can now exclude other companies from its decisions.

      The prior is to recognize and prevent the creation of horizontals (i.e. the single provider of a product or service, e.g. Microsoft-OS's) and verticals (i.e. the single provider of an entire product from start to finish, e.g. Monsanto-food).

      The EU commission wants to know, I suspect, whether this merger will make Oracle the only provider of certain products and services (e.g. databases), or alternatively whether it will make Oracle a single solution provider at the expense of others (i.e. bundling the Oracle database with Solaris operating systems with Sparc servers so as to exclude PostgreSQL, Linux and Intel). In the prior case there are obviously other databases, PostgreSQL, etc., and in the latter there are clear reasons why the merger wouldn't hurt the OS or server market (namely there is vibrant competition in both with Solaris). That's just my opinion, though - I don't know the details.

  • Why does Europe get to hold up a purchase of an American company by an American company? Or is that not the case?
    • by Microlith (54737) on Wednesday October 21, 2009 @01:30PM (#29825603)

      They both operate in Europe as well. When you're a large, multinational corporation you generally have to accept regulatory practices of each nation you wish to operate in.

    • Because Sun and Oracle want to be able to sell their products in Europe. If they decided not to then, by all means, they can ignore the EU's authority.

    • by Tom (822) on Wednesday October 21, 2009 @03:45PM (#29827581) Homepage Journal

      Because they aren't "american companies". They are multinational corporations. They have offices and subsidaries in Europe and probably a dozen other places all around the world. Their HQs happen to be in the USA, but aside from that they're only "american" when appealing to patriotism serves their bottom line.

  • by etymxris (121288) on Wednesday October 21, 2009 @01:30PM (#29825597)

    I don't even know why Sun paid a billion for it in the first place. IIRC, most of the original people behind it have left and started their own companies around mysql open source forks, or gone to other projects. The supposed "ownership" Oracle will have seems mostly worthless. If they were rational they would have jettisoned MySQL at the first sign of EU resistance.

    That said, I have little sympathy for the EU here. They're taking hundreds of millions of dollars out of Oracle/Sun's coffers due to the delays, then turning around and saying that the burden is on Oracle to prove it's innocence. If the EU is going to be so disruptive to businesses, they need to act quickly and with their own resources. I'm no fan of corporations, but the EU looks to be clearly in the wrong here.

    • by Malc (1751)

      Surely this was rather predictable. Oracle need better lawyers who would have advised them. Where was their planning?

    • by gclef (96311) on Wednesday October 21, 2009 @02:20PM (#29826405)

      That said, I have little sympathy for the EU here. They're taking hundreds of millions of dollars out of Oracle/Sun's coffers due to the delays

      Oh, nonsense. An organization the size of Oracle had to know that a merger like this would attract regulatory scrutiny. Every single news story about this has brought up that regulators would be looking at this one carefully. This shouldn't be a surprise that it's getting attention. Also, anyone who's paid attention to the Microsoft battles with the EU should have been aware they the EU competition regulators are much stricter than the US regulators.

      Basically, for Oracle to pull this deal, they had a responsibility (I'll even go so far as to call it a fiduciary duty, since it's apparently costing them lots of money) to be ready for this scrutiny. This story seems to indicate that they weren't.

    • If they were rational they would have jettisoned MySQL at the first sign of EU resistance.

      But they aren't Rational. Rational is owned by IBM. [ibm.com]

    • The fact that you have little sympathy for the EU here, without any stated reasons - it is coming from the guts, is exactly why Larry managed to use this nonsense to hide their own evil reasons for the layoffs, by using people who bend forwards and follow up on the nonsense. Stop being Larry's instrument. You look clearly wrong here. And hey, I provided actual argumentation, unlike you.
      • by smartr (1035324)
        I don't see how the EU dragging its feet one way or the other is helping anybody but Sun's competitors. I suppose the theory is "competition" will be promoted by poisoning a weak competitor. There's no "yes/no/x stipulations", there's just feet dragging.
    • MySQL is just a front end to a back end storage system. Perhaps the goal is to start peddling a commercial MySQL installation, compatible with current MySQL installations, but has an Oracle DB backend for more enterprisey features!
      • by demachina (71715)

        People use MySQL because its free, simple and easy. If they wanted an expensive Oracle DB they would be using..... Oracle.

        There is a near certainty Oracle is looking to mess with MySQL one way another or they would have spun it out of this deal already and it kinds of looks like the EU knows it. Oracle can't exactly kill MySQL since its open source but they sure can mess with it in to the future and force a migration to a fork and a new brand name which is usually messy. I doubt Ellison has any love loss

      • More to the point, provide a migration path. Once you've got that Oracle license, why not migrate all of your MySQL apps over to using it? Oh, they all use weird MySQL extensions? Never mind, you just need the new MySQL personality for Oracle which emulates all of MySQL's 'features' (even the data loss!) and lets you consolidate everything onto a single Oracle appliance.
    • by Znork (31774) on Wednesday October 21, 2009 @02:53PM (#29826899)

      If they were rational they would have jettisoned MySQL at the first sign of EU resistance.

      The fact that Oracle didn't do exactly that is really the strongest indication that Oracle really did have some anticompetitive intent with the acquisition. I can't really see what (nefarious schemes to kill it off would most likely be unsuccessful, as would locking it in, etc), but then I could never really see what Oracle could get out of the acquisition.

      They're taking hundreds of millions of dollars out of Oracle/Sun's coffers

      Would Sun magically stop bleeding if the merger completed? Maybe if Ellison went 'k thanks oh btw you're all fired' on the first day. But really, in the short term I don't see the schedule of the merger really affecting the scale of the losses. The uncertainty of Suns customers wouldn't be ameliorated by having Oracle finalized as an owner, so pretty much the only thing that'd change would perhaps be the interest rate on some loans.

      It simply isn't the EU that's causing the losses and they'd be there either way.

      • by demachina (71715) on Wednesday October 21, 2009 @03:07PM (#29827069)

        Exactly right. Chances are Ellison is loving this since he can blame the carnage on the EU, he gets SUN to take all the charges for the layoffs, and he gets rid of people he would have fired the day after the merger closed anyway. Only interesting question is if Schwartz and SUN decided who got canned or if Ellison and Oracle are deciding. Chance are SUN at least consulted with Oracle on who got the ax.

    • by rbanffy (584143)

      "I don't even know why Sun paid a billion for it in the first place"

      That's it. Fire the 3000 employees closer to whoever made this stupid decision.

      Their marketing team should go too.

  • by mysidia (191772) on Wednesday October 21, 2009 @01:36PM (#29825707)

    Does it do the public any good, if the regulatory agency kills the competitor being acquired, by delaying a decision?

    By the time the acquisition is approved or rejected, Sun will be basically dead, and barely have any role as the competitor, anyways.

    • by vlm (69642)

      Sun will be basically dead, and barely have any role as the competitor, anyways.

      So, if the situation is unchanged, whats the rush?

    • by noundi (1044080) on Wednesday October 21, 2009 @02:12PM (#29826263)

      Does it do the public any good, if the regulatory agency kills the competitor being acquired, by delaying a decision?

      By the time the acquisition is approved or rejected, Sun will be basically dead, and barely have any role as the competitor, anyways.

      Obviously if you read TFS Oracle is responsible for not providing substantial data. If this was truly a harmless move they would have stopped this fictional $100 million/month charade and sold off MySQL already. But they don't want to. Why? Because they want to own 100% of the OSS database enterprise market. So they get Sun to use the opportunity to fire 3000 people instead and say: "LOOK WHAT YOU MADE US DO!" With or without MySQL the merger will take place, they will fight until the bitter end, but either way those 3000 layoffs were probably planned months ago. You don't suddenly fire 3000 people, and anybody who think this is anything but months of planning and execution is naive and has never worked within management.

      • "OSS database enterprise market"? Are you kidding? So now we can just make obscure definitions for markets and then cry that they're being stomped by some big mean corporation?

        I hereby protest the acquisition of LeisureCorp by DynaCorp. Dynacorp will be the only producer of green lawn furniture produced in a building that is energy efficient and which produces green lawn furniture with a nylon content of less than 25% and which offers MegaHealthCare insurance to its employees. This could be a market tra

    • by Tom (822)

      Yes, it does good.

      The entire philosophical underpinning of free market theory rests on certain assumptions. One of them being that neither a single supplier nor a single consumer has a commanding influence over the market. As soon as that happens, everything you learned about price finding, supply-and-demand, market equilibrium and all the other "magic" breaks down.

      These are the people who guard the free market. They may not be perfect, but I'm damn happy we have them. Economics 101 tells you what happens i

  • by Lemming Mark (849014) on Wednesday October 21, 2009 @01:47PM (#29825855) Homepage

    Did the US regulators have similar concerns? If not, why not? If they're genuine concerns - they sound like it - why is it just the EU that's following them up?

    There generally seems to be a certain amount of frustration that the EU is holding up companies of US origin, although actually they have significant financial impact (and offices and presumably regional headquarters and subsidiary companies) in Europe too. Presumably Oracle and Sun *themselves* could have predicted these hurdles if they'd done their homework - is it really that outlandish to expect that merging two leading (albeit in different markets!) database companies would be a worry for the regulators?

    Presumably Oracle and Sun would be welcome to merge if they had terminated their entire presence in Europe - they're not proposing doing that and one assumes it's because Europe is a big enough financial interest for them that they believe it's *worth the wait*. They may not have a choice, in practical terms, but one assumes they have years / decades of making money from their European dealings so it's not like the EU is just a plain dead weight for them.

    This is the same EU that is cracking down on anticompetitive behaviour from MS and Intel, which generally seem to be popular moves with folks here. Would the tech industry really be in a better position if they reduced their scrutiny? Or if they applied it only to certain companies.

    To me it seems a bit "convenient" that, in an economy where many jobs have to be lost anyhow (and as a merger is occurring, which may also naturally lead to job losses) people are blaming job losses solely on the regulators doing their jobs and not on sharp practice, opportunism or plain lack of co-operation from large multinationals operating in a cutthroat market.

    • Did the US regulators have similar concerns? If not, why not?

      . . . like GM, Chrysler, Wall Street, Savings & Loans . . . etc. All looking for government bailouts.

      Oracle's Ellison was willing to bankroll the rescue of Sun with his own money.

      With so many other headaches on their plate, the government was probably just happy to see a solution for Sun that didn't require gobs of taxpayer money.

    • Re: (Score:2, Insightful)

      by KlaasVaak (1613053)

      Did the US regulators have similar concerns? If not, why not? .

      Because they have a different philosophy than the EU. The EU has been the leading anti-trust regulator in the world for a long time now simply because they believe it's in societies best interest to force companies to compete whereas the US believes more in the innovative power of unregulated companies and thus have a more laissez-faire attitude.

      • by rsborg (111459)

        The EU has been the leading anti-trust regulator in the world for a long time now simply because they believe it's in societies best interest to force companies to compete whereas the US believes more in the innovative power of unregulated companies and thus have a more laissez-faire attitude.

        It seems more and more that the US has become completely controlled by big business who are in turn owned by the elites (the top 1% who own more than 50% of everything).

        (Economic) Freedom isn't Free. So tell me who b

    • by RogerWilco (99615) on Wednesday October 21, 2009 @02:14PM (#29826307) Homepage Journal

      Did the US regulators have similar concerns? If not, why not? If they're genuine concerns - they sound like it - why is it just the EU that's following them up?

      There generally seems to be a certain amount of frustration that the EU is holding up companies of US origin, although actually they have significant financial impact (and offices and presumably regional headquarters and subsidiary companies) in Europe too. Presumably Oracle and Sun *themselves* could have predicted these hurdles if they'd done their homework - is it really that outlandish to expect that merging two leading (albeit in different markets!) database companies would be a worry for the regulators?

      I was wondering this too. What I've seen so far of Neelie Kroes in the last couple of years, she's been very fair, and quick to act if she could. It's only when companies are dragging their feet and fail to reply to the raised concerns that get raised. And she might have given some big fines to US companies, the biggest and most fines have still been applied against EU companies.

      And given that Oracle is acquiring MySQL with this merger, I think the EU certainly has a point, the only other sizeable players remaining are PosGreSQL and Microsoft. Basically you end up with a market that looks similar to the OS market with Linux and OSX as competitors to Windows, and for the OS market I think Windows has been ruled a (near) monopoly on both sides of the Atlantic. I think the EU is well within its rights if it wants to prevent the situation that the current OS market is in.

    • Presumably Oracle and Sun *themselves* could have predicted these hurdles if they'd done their homework - is it really that outlandish to expect that merging two leading (albeit in different markets!) database companies would be a worry for the regulators? ........ Would the tech industry really be in a better position if they reduced their scrutiny? Or if they applied it only to certain companies. ...... To me it seems a bit "convenient" that, in an economy where many jobs have to be lost anyhow (and as a merger is occurring, which may also naturally lead to job losses) people are blaming job losses solely on the regulators doing their jobs and not on sharp practice, opportunism or plain lack of co-operation from large multinationals operating in a cutthroat market.

      Yup... it brings back memories from the recent past when all kinds of people were whining, pissing and moaning about how evil regulators stood in the way of Wall Street in it's quest to make the world a better and wealthier place with innovative financial products and free market fundamentalist dogma. In the middle of this stirring chorus of people chanting "deregulation" in perfect harmony.... BAM.... alluvasudden we had our selves a global banking crash. Now those same people are asking: "where were the r

    • why is it just the EU that's following them up? Because the US govt is just a branch of the corporates.
    • by mr_death (106532)
      The EU regulators are dragging their feet -- any idiot can look around and note the significant market share of IBM's DB2 and Microsoft's SQL Server and come to the simple conclusion that competition does exist in the database market.
  • Ellison (Score:5, Interesting)

    by TopSpin (753) * on Wednesday October 21, 2009 @02:17PM (#29826355) Journal

    Larry doesn't mind; the EU delay gives him a scapegoat for the layoffs.

    Those of you fixated on MySQL: Sun sells hardware, software licenses and contract support to enterprises that use SQL Server, DB2, SAP and other direct competitors of Oracle, meaning the some DB2 users (for instance) will find themselves relying on Oracle for support of certified DB2 platforms... MySQL may be the least of whatever "competition problems" the EU has in mind

    • Re:Ellison (Score:4, Insightful)

      by quantum bit (225091) on Wednesday October 21, 2009 @02:34PM (#29826609) Journal

      Also, high end Oracle databases typically run on either Linux for distributed (cheap) clusters, or HP-UX/Solaris on high end hardware for big monolithic installations. Oracle already has their own Linux distribution that they push pretty hard, and once they buy Sun they'll own a major commercial UNIX player, too.

      Oracle has traditionally been buddy buddy with HP, but since the announcement of the Sun deal, they've started giving them the cold shoulder. While I doubt they'd drop HP-UX support entirely (there would be outrage), I can certainly see them doing things to try to push people onto Solaris or Oracle Linux, on Sun hardware, and wrapping everything up as a neat package deal.

      • That is a good reason for them to merge. Getting hold of Java may be another one (altough a business case for Java other than destroying Microsoft seems quite hard to find). Now, if those were so important, Oracle would have already let MySQL go. They are quite interested on owning a big competitor.

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