SANTA CLARA — Oracle this week moved to lay off about 450 employees in its Santa Clara hardware systems division, according to a letter sent to the Employment Development Department.
The news comes as the Redwood City-based giant is undergoing a broader shift away from its traditional software and hardware products, and focusing its attention on the cloud.
“The Santa Clara facility is not closing as part of this reduction in force,” the company wrote Wednesday. “Rather, Oracle is refocusing its Hardware Systems business, and for that reason, has decided to lay off certain of its employees in the Hardware Systems Division.”
Workers on the chopping block included hardware and software developers, along with a handful of managers, technicians and administrative assistants. Oracle intended to notify affected employees by Thursday. Those who were laid off were to receive full pay and benefits for 60 days, according to the letter, which was sent to the government agency as part of Oracle’s obligation under federal law to provide notice of impending mass layoffs.
Oracle declined to comment, and did not say whether the company went through with the cuts as planned.
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Rumors of layoffs had been swirling online this week on sites such as thelayoff.com.
For years Oracle made its money by selling software and hardware products to businesses that used them to run their own on-site data centers. But as cloud computing has become popular, with more companies turning to providers such as Salesforce.com to run their business applications instead of running them on their own servers, Oracle’s software and hardware sales have suffered.
Oracle’s revenue from hardware products fell 13 percent in September through November of 2016 compared to the same time period year before, according to the company’s most recent quarterly earnings report. Its revenue from new software licenses plummeted 20 percent.
Oracle also apparently has axed plans to release the next major version of its Solaris operating system, tech news site Ars Technica reported.
In response to declining software and hardware revenue, Oracle has pivoted, building data centers, offering cloud services to companies and selling software that is rented over the internet instead of bought in a box. Revenue from the company’s cloud software as a service and platform as a service grew 81 percent in its latest earnings report.
“This year we are selling more enterprise SaaS (software as a service) than any cloud services provider in the world,” Oracle co-CEO Mark Hurd wrote in a December news release announcing the earnings. “We expect to book over $2 billion in new annually recurring cloud business this year alone.”