Oracle chief denies lay-off plan

PUBLISHED : Thursday, 13 June, 2002, 12:00am
UPDATED : Thursday, 13 June, 2002, 12:00am

Chief executive Larry Ellison denied on Wednesday that Oracle planned to lay off any of its 42,000 employees or that competitors were eroding the company's market share.

Oracle's profit margins were being maintained at a spectacular 35 per cent, he said in a speech at the opening of OracleWorld Beijing. He contested a recent Gartner Dataquest report indicating that IBM had overtaken Oracle in overall database market share.

Mr Ellison attacked Gartner for not revealing its methodology and referred to a Goldman Sachs study showing that 60 per cent of new databases were being built on Oracle and 3 per cent on IBM's DB2.

When a reporter asked about rivals eating into his company's market share, Mr Ellison replied: 'If IBM is eating, they're on a diet. In fact, they're on a low-cal diet, they're on a starvation diet. IBM has to explain how the number three is larger than the number 60.'

On the subject of layoffs, Mr Ellison said Oracle recently cut 200 staff, while 'IBM is laying off thousands and thousands of people'. Using a stage manner that some people have called bombastic, Mr Ellison added: 'You know why? Because they're gaining market share.'

The opening day of the week-long conference had a heavy emphasis on Oracle's plans for the China market. The company said it planned to release its software in Chinese on the Web for developers to work with. Up to now, the 65,000 Chinese developers registered with the Oracle Technology Network (OTN) site have had access to software written in English only. Oracle said it aimed to quadruple the number of Chinese OTN members in six months.

Mr Ellison said he expected staffing at both the Beijing and recently established Shenzhen labs to produce a lot of the software Oracle writes for both the Chinese and overseas markets. 'I think you'll see very substantial engineering teams in China, both in the north and the south,' he said.

The emphasis on China was strong enough yesterday that Oracle found itself on the defensive about its commitment to India. The company has about 2,000 developers there in two software centres and has plans to at least double staff in India.

More of Oracle's software projects were being moved to India, said Derek Williams, executive vice-president of Oracle's Asia division. There was no restriction on how fast the company added staff there.

However, Mr Ellison said that China would compete with India for outsourced and offshore software development.

Oracle's sales on the mainland grew by 50 per cent last year, though the company said it did not break out country-specific figures. Mr Williams said he expected Oracle to report an increasing portion of sales coming from Asia when it announced fourth-quarter earnings later this month. Brokerage analysts several weeks ago downgraded Oracle stock on the expectation of a disappointing earnings report, but the company has denied such speculation.

While Oracle declined to put a figure on its China investments, Mr Ellison said that he saw government and businesses moving very quickly on installing the latest technology.