PeopleSoft over the next year will reduce its employee headcount by about 7 per cent, cutting 750 to 1000 positions to eliminate redundancies created through its recent acquisition of J.D. Edwards & Co., according to PeopleSoft executives.
The company picked up 5000 employees though its J.D. Edwards buyout, bring its total staff size to 13,000. The company expects its 2004 headcount to be about 12,000, with cuts affecting administrative, marketing and middle management positions, PeopleSoft Chief Financial Officer Kevin Parker said.
PeopleSoft's ranks of development, consulting and quota-carrying sales employees would not be included in the layoffs, Parker said. PeopleSoft expects to save $US10 million to $US15 million in 2004 through the staffing reductions.
The final purchase price for J.D. Edwards worked out to just shy of $US2 billion, according to Parker. Announced in June, the acquisition was fully completed on Friday.
PeopleSoft, now number two in the business applications market behind SAP, forecasts revenue of at least $US2.8 billion next year.
At the meeting, PeopleSoft unveiled its integration roadmap, introducing its three new product lines: PeopleSoft Enterprise, built around PeopleSoft's core applications suite; PeopleSoft EnterpriseOne, a mid-market line built around J.D. Edwards' suite; and PeopleSoft World, an AS/400 line that includes J.D. Edwards' World portfolio. Over the next year, PeopleSoft will work on cross-pollinating its technology and J.D. Edwards', according PeopleSoft's executive vice-president for products and technology, Ram Gupta.
For example, the PeopleSoft Enterprise line would gain asset and real estate management features developed by J.D. Edwards while the EnterpriseOne line picked up supplier and human resources management capabilities from PeopleSoft, Gupta said.
PeopleSoft chief executive officer, Craig Conway, reiterated a theme he had focused on since announcing PeopleSoft's acquisition plans, emphasising that this deal was about market expansion, not consolidation. PeopleSoft's goal is to expand its product portfolio and improve both its own applications and J.D. Edwards'.
"These product lines should be so superior that they should never lose in competition in the marketplace," he said. PeopleSoft will elaborate on its product plans at its upcoming PeopleSoft Connect user show in Anaheim, California, which begins September 14, executives said.
AMR Research analyst, Jim Shepherd, said that J.D. Edwards customers had not yet had time to feel any effects from the very recently consummated merger.
How well PeopleSoft executes its J.D. Edwards integration plans remaines a concern for customers and shareholders, but Conway was confident things will proceed smoothly in the crucial coming months.
"The No. 1 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," Conway said. "It's like having an elephant as your college roommate."