Oracle refocuses in Europe and may cut jobs

Oracle has confirmed that it is refocusing its European applications division and has hinted that it may reduce the unit's workforce.

The move is likely to affect the database supplier's consultancy business and follows the company's decision to make some 60 UK consultants redundant last August. This was seen as part of a drive to cut $1bn a year from its costs.

Mark Williams, a casualty of the firm's job cuts and now a consultant with Oracle implementer Myriad Business Consultants, said: "There was no logic to the way staff were selected. I was implementing at a client at the time."

Mark Jarvis, Oracle's senior vice president of marketing, declined to comment on specific staff cuts, but he admitted that the company's skills mix needed to change as demand shifted from enterprise resource planning applications to customer relationship management (CRM) packages.

"We haven't really fired people," he said. "We've said the business is changing, this is where we are going, and we understand if you (as an employee) don't want to change."

Analysts agreed that Oracle's focus on CRM requires different implementation skills, and it is understood that Pier Carlo Falotti, Oracle's European vice president, is looking at how to reshape the company in the region to enable it to work in a more collaborative way.

Sergio Giancoletto, Oracle's senior vice president of business solutions for Europe, the Middle East and Africa, said: "It has been difficult. Individual countries have wanted to hang on to their individual identities."

Rick Powles, director for Oracle UK's CRM unit, said: "My perception is that there is a need to revisit the skills set. We had sales and service skills, but had to acquire skills for call centre products."

He confirmed that Oracle is not hiring staff to handle its sales force and service automation applications, however.

But Giancoletto said that more than 60 per cent of Oracle's applications contracts had been implemented by third-party consultants during the last year.

"We are still looking at the number of people, but there is still a skills shortage in CRM," he said.

In the past, Oracle's consulting division generated more than 50 per cent of the applications division's revenue. This had led some critics to accuse the company of not being serious about developing its applications business and merely seeing it as another channel to feed its lucrative internal consultancy division.

Last year, however, Oracle said it would look at how to become a better business partner with its third-party implementers.