Thread regarding Oracle Corp. layoffs

2 Billion in cost savings for Oracle still to be realized from pivot to the cloud

One wonders if you are worth more than the perceived value of cost savings from letting you go. Lets do some quick executive level math. As of last fiscal year oracle had over 130,000 employees globally. In FY 2107 they hatched a plan to cut approximately some where between 20 and 30% of the company under the guise of cloud automation.

Its an exciting story. A great way to show wall street real cost savings inside Oracle. Using our own cloud automation we were able to reduce our employee costs by 25%.

Oracle 10Q:

http://d18rn0p25nwr6d.cloudfront.net/CIK-0001341439/6aae1efb-e6ff-44cb-9563-94b1d5ebd7e1.pdf

Lets take a look at the numbers in a post here @Qj6eGUR. The Oracle 10Q filed with the security exchange commission showed $475 million was to be used for employee severance packages by May 31st 2018. The assumption was an average salary of 120,000 and a 10 year history with the company for an average package of $30,000. From this we can calculate the number of employees to be let go.

$475,000,000 / $30,000 = 15,833

If we look at this we expect another 15 thousand or so will be let go before May 31st next year. The question no one asked is whats the upside to Oracle, for dumping all these employees? Well if we assume a 120k base and we have 15k employees then we can calculate the annual cost savings still to be realized from Oracle's pivot to the cloud.

15,833 x 120,000 = $1,899,960,000

Wow that is a whopping 1.8 billion dollar cost reduction year over year. That's huge. Who wouldn't want to save 2 billion a year in salary? Whats the real cost savings, whats the total? What can MH go to wall street with and say we save x billion a year in employee salaries by pivoting to the cloud?

$1,100,000,000 / $30,000 = 36,666

The interesting thing is we can play with the severance package average and the base salary and adjust up or down the number of employees, but the basic cost savings works out. A higher salary means a higher package and a higher overall cost savings with fewer employees let go. A lower salary just means more employees let go. But the over all cost savings stay relatively close.

36,666 x $120,000 = $4,399,920,000

Oracle saved 4.3 billion dollars by pivoting to the cloud in employee salary expense alone. Who wouldn't want to save that kind of money annually? Heck thats 10% of revenue for a 40 billion dollar company.

Pivoting to the cloud added 10% to Oracle's bottom line year over year. So here is the big deal. If we still have about 2 billion to be realized... how safe are you? Which sounds better?

Oracle added 10% to its bottom line by pivoting to its own cloud in cost savings. Or Oracle saved 5%? Five percent? Really no big deal...

10% is a good solid number, if you last through the end of the year, odds are that $475 million put aside will be used by May 31st 2018. There really isn't much that can prevent this. Its too cool, to much executive swag put on this. Too much money and planning to back out just because you are smart and valuable to xyz product.

Mark my words your days are numbered at Oracle.

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Post ID: @OP+QwV16wP

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Why does Oracle even need to pivot to cloud computing and waste all these cycles and create so much confusion- they have been doing cloud computing already for over 20 years. https://www.youtube.com/watch?v=0FacYAI6DY0

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Post ID: @2ruj+QwV16wP

Good analysis, except that as you well know Oracle’s cost saving, of course, have nothing to do with saving from the cloud, rather oracle is getting out of lots of businesses, including hardware and on-peek software. So any story that oracle tells about saving money no going to the cloud is a pack of lies.

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Post ID: @xyx+QwV16wP

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