PeopleSoft details post-buyout plans

PeopleSoft details post-buyout plans

By Stuart Finlayson

PeopleSoft executives have outlined the ERP vendor's plans for running the recently-acquired J.D. Edwards.

Speaking at an analyst meeting in New York, senior figures at the company said they intended to maintain the mainframe and client-server versions of J.D. Edwards' software and its own set of applications as three distinct product lines.

The J.D. Edwards name will disappear though, with its products to be renamed PeopleSoft World and PeopleSoft Enterprise One, respectively.

The fact that the J.D. Edwards product line will continue - albeit rebadged – will come as a relief to its customer base. Not so relieved, however, will be the employees of both companies, particularly those in administrative, middle management and marketing positions, as PeopleSoft announced that between 750 and 1000 jobs will be cut in those areas, accounting for between six to eight percent of the combined total workforce of 13,000. The cuts are expected to save up to US$200 million in duplicate costs.

PeopleSoft also pinpointed the opportunity to cross sell its products to J.D. Edwards' customers as well as selling J.D. Edwards' products to its existing customer base. In order to facilitate such a move, PeopleSoft intends to make the two companies' products more compatible with each other.

PeopleSoft management also intends to buy back US$350 million worth of stock, about 18 million outstanding shares, by the end of the year. That represents more than 5 percent of the 316.6 million shares currently outstanding. It is a move that will further harm Oracle's chances of succeeding in its hostile takeover bid.

On the subject of Oracle, PeopleSoft chief executive Craig Conway sought to highlight the contrast between its intentions for J.D. Edwards' product line and Oracle's stated plan to acquire PeopleSoft and discontinue selling PeopleSoft's products, a revelation that Oracle is now trying to distance itself from.

"This was never intended as a consolidation play," said Conway. "It was never intended to drive down the size of the product line or to coerce or enable a revenue stream by consolidation. It's always been about growth."

Despite Conway's insistence that the Oracle bid is dead in the water, Oracle has not yet given up on its US$7.25 billion bid, which is currently under scrutiny from antitrust regulators. Its current bid for PeopleSoft shares expires on September 19, but Oracle is likely to extend this further - as it has done already – as it seems set to gnaw away at PeopleSoft like a dog on a bone until any possibility of them concluding the acquisition has been finally extinguished.

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