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Oracle Cuts More Jobs in Its Hardware and Solaris Units

Sep 05, 2017

Oracle has laid off what appears to be a significant number of employees working on its hardware and Solaris operating system efforts, according to anonymous posts on TheLayoff.com, the gist of which were confirmed to Fortune by former Oracle employees.

Both Oracle's server and Solaris efforts emanated out of Sun Microsystems, a company Oracle acquired in 2010 for $7.4 billion. Before then Oracle had been a software company specializing in databases and financial applications, so jumping into computer servers and SPARC microprocessors—another Sun business—was a stretch. Solaris was Sun's version of Unix, a powerful operating system that powered its servers.

Unofficial tallies on the The Layoff site and elsewhere put total of jobs cut at around 2,500, affecting the company's Santa Clara and San Diego, Calif. offices, as well as people in Austin, Texas, Broomfield, Colo., Burlington, Mass., and India. Layoff notices went out the Friday before the long Labor Day weekend, according to tech news site The Register.

An Oracle (orcl) spokesperson declined comment on this story.

In a blog post called The Sudden Death and Eternal Life of Solaris, former Sun executive Bryan Cantrill wrote that, based on his conversations with current Solaris team members, these cuts are "so deep as to be fatal: The core Solaris engineering organization lost on the order of 90% of its people, including essentially all management."

Another former Sun executive tells Fortune the Layoff reports are accurate, based on his talks with affected employees.

Word of these cutbacks comes a week after Oracle said it is hiring 5,000 cloud-computing-related workers in the U.S. this year.

Oracle surprised many with its purchase of Sun, a long-time hardware partner. But Oracle co-founder Larry Ellison—who was then CEO—said Oracle would use Sun's Sparc microprocessor and server business to build a software-hardware juggernaut in the mold of the IBM, of a generation before. IBM is a long-time Oracle rival.

But Oracle struggled with server sales from the get-go with hardware revenue falling quarter after quarter. This despite claims by Ellison and Oracle co-CEO Mark Hurd that by focusing on high-end (e.g. profitable) servers would pay off for the company, which would leave low-end server sales to the commodity providers of the world.

Related: Oracle Hardware Chief Will Now Lead its Cloud Effort

Last December, Oracle co-CEO Safra Catz said the company would take a hard look the hardware business. A month later, it trimmed an estimated 450 jobs, mostly from the hardware business.

Some Oracle watchers, already worried about the fate of server systems, saw last month's resignation of John Fowler, Sun's long-time hardware chief, as a bad omen. His departure was mentioned in a July 27, 2017 federal filing.

Legacy tech providers including Oracle, IBM, and HPE (hpe) have had to negotiate a tough transition in which more customers are weighing the use of massive public cloud data centers run by Amazon Web Services or Microsoft Azure to augment or even replace their own data centers.

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Customers going that route replace the servers they run in-house less often than in the past and may even stop expanding their own data centers. Worse, for the traditional server makers, the major cloud providers use servers of their own design rather than pricey brand-name servers like those Oracle pitches. Oracle runs its own public cloud entirely on its own hardware and software, so it is unlikely that it will cut its entire server unit.

Note: (September 5, 2017 11:29 a.m. EDT) This story was updated to add mention of John Fowler's resignation from Oracle.

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