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PeopleSoft unveils J.D. Edwards roadmap, plans job cuts

Sep 05, 20033 mins
Enterprise ApplicationsMergers and AcquisitionsStaff Management

PeopleSoft over the next year will reduce its employee headcount by about 7%, cutting 750 to 1,000 positions to eliminate redundancies created through its recent acquisition of J.D. Edwards, PeopleSoft executives said Thursday during a meeting in New York with analysts.

PeopleSoft picked up 5,000 employees though its J.D. Edwards buyout, bring its total staff size to 13,000. The company expects its 2004 headcount to be around 12,000, with cuts affecting administrative, marketing and middle management positions, PeopleSoft Chief Financial Officer Kevin Parker said during a presentation. PeopleSoft’s ranks of development, consulting and quota-carrying sales employees will not be included in the layoffs, Parker said. PeopleSoft expects to save $10 million to $15 million in 2004 through the staffing reductions.

The final purchase price for J.D. Edwards worked out to just shy of $2 billion, according to Parker. The acquisition, which was announced in June, was fully completed on Friday.

Thursday’s meeting served as PeopleSoft’s coming-out party as an expanded company incorporating J.D. Edwards. The company, now number two in the business applications market behind SAP AG, forecasts revenue of at least $2.8 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 midmarket 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 to Ram Gupta, PeopleSoft’s executive vice president for products and technology.

For example, the PeopleSoft Enterprise line will gain asset and real estate management features developed by J.D. Edwards while the EnterpriseOne line picks up supplier and human resources management capabilities from PeopleSoft, Gupta said.

PeopleSoft CEO Craig Conway reiterated a theme he has focused on since announcing PeopleSoft’s acquisition plans, emphasizing that this deal is 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, Calif., which begins Sept. 14, executives said.

One analyst attending Thursday’s presentation, AMR Research’s Jim Shepherd, said that J.D. Edwards customers have not yet had time to feel any effects from the very recently consummated merger. How well PeopleSoft will execute on its J.D. Edwards integration plans remains a concern for customers and shareholders, but Conway expressed confidence that 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.”

Oracle’s lingering $7.3 billion takeover bid for PeopleSoft went unmentioned during PeopleSoft executives’ presentations. In response to a query during a question-and-answer session, Conway dismissed the bid, strongly opposed by PeopleSoft’s board, as essentially dead.

“I don’t think the Oracle bid is a current issue,” he said. “It’s a movie that has been playing a long time. I think people have lost interest in it.”