Job cuts blight PeopleSoft's JD Edwards roadmap

PeopleSoft will reduce its employee headcount by about 7% over the next year, cutting 750 to 1,000 positions to eliminate...

PeopleSoft will reduce its employee headcount by about 7% over the next year, cutting 750 to 1,000 positions to eliminate redundancies created through its recent acquisition of JD Edwards.

PeopleSoft picked up 5,000 employees in the buyout, bring its total staff size to 13,000. The company expects its 2004 headcount to be around 12,000, with cuts affecting administrative, marketing and middle management positions.

PeopleSoft's ranks of development, consulting and quota-carrying sales employees will not be included in the layoffs. The company expects to save $10m to $15m in 2004 through the staffing reductions.

The final purchase price for JD Edwards worked out at just under $2bn.

The merged company, now number two in the business applications market behind SAP, forecasts revenue of at least $2.8bn next year.

Yesterday PeopleSoft unveiled its integration roadmap, introducing three new product lines: PeopleSoft Enterprise, built around PeopleSoft's core applications suite; PeopleSoft EnterpriseOne, a midmarket line built around JD Edwards' suite; and PeopleSoft World, an AS/400 line that includes JD Edwards' World portfolio.

Over the next year, PeopleSoft will work on cross-pollinating its technology and that of JD Edwards, said Ram Gupta, PeopleSoft's executive vice president for products and technology.

The PeopleSoft Enterprise line will gain asset and real estate management features developed by JD Edwards while the EnterpriseOne line picks up supplier and human resources management capabilities from PeopleSoft.

PeopleSoft chief executive officer Craig Conway reiterated a theme he has focused on since announcing PeopleSoft's acquisition plans, emphasising that this deal is about market expansion, not consolidation. PeopleSoft's goal is to expand its product portfolio and improve both its own applications and JD Edwards'.

"These product lines should be so superior that they should never lose in competition in the market," he said.

PeopleSoft will elaborate on its product plans at its upcoming PeopleSoft Connect user show in Anaheim, California, which begins on 14 September.

AMR Research analyst Jim Shepherd said that JD Edwards customers have not yet had time to feel any effects from the merger. How well PeopleSoft will execute  its JD Edwards integration plans remains a concern for customers and shareholders, but Conway expressed confidence that things will proceed smoothly in the crucial coming months.

"The number one thing I've always worried about with acquisitions is benign neglect, and we don't have an opportunity for that because the acquisition itself is so large," he said. "It's like having an elephant as your college roommate."

As to Oracle's lingering $7.3bn takeover bid for PeopleSoft, Conway dismissed the bid, strongly opposed by PeopleSoft's board, as essentially dead.

"I don't think the Oracle bid is a current issue," he said. "It's a movie that has been playing a long time. I think people have lost interest in it."

Stacy Cowley writes for IDG News Service 

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