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Oracle layoffs hit channel operations hard

Channel managers and other channel-facing employees got hit hard in recent Oracle layoffs.

A big chunk of Oracle Corp.'s recent layoffs came in the company's channel-facing groups, according to Oracle partners.

Oracle cut between 500 and 800 jobs this month, and it appears that a large number of them were in channel management and Oracle Direct -- the company's telesales operation. Oracle has not acknowledged the layoffs, and a spokeswoman would not comment on whether the layoffs disproportionately affected channel-related employees.

But partners are unequivocal.

"It was a bloodbath in the channel teams and in the Oracle Direct teams that worked with the channel," said one Oracle value-added reseller on the West Coast. (None of the partners who spoke with on this topic would be quoted by name.)

The cuts would have to be huge in number to be material to the company, which has a total headcount of over 80,000. Partners said they suspect the reasoning behind the cuts is that Oracle wants to take more sales direct. Oracle partners and sources inside the company expect more layoffs to follow before the new fiscal year starts in June.

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The layoffs happened late in the week of Jan. 5, according to partners. They said the move comes at a time when sales are down -- hurt both by the faltering economy and by Oracle's price hikes last summer.

Oracle channel managers axed

A Midwest partner said Oracle cut all of his local channel managers and told him that other, more geographically distant managers would fill some of the gaps.

"Channels got hit pretty hard," this partner said.

He's been told his Oracle technology (or database) business will now be handled out of Boston, more than 1,300 miles away. And there are no plans to replace his applications channel manager at all, he said.

The downsizing of Oracle's channel group is no small thing to Oracle partners who have contended with channel conflict over the years.

"The channel managers help us break down barriers between [Oracle field sales] and the partner team," said another partner in the Great Plains. "They position us to get leads from Oracle and also to co-work deals and co-sponsor marketing events."

A good number of field sales consultants and a "great number" in Oracle Direct lost their jobs, especially in the Toronto office, he said.

Oracle Direct can be a friend or foe to partners. Many of the telesales people call customers trying to make direct sales deals. But some work with partners.

"Every Oracle partner who is successful has key contacts in OD," this partner added.

There are also times when Oracle Direct actually comes up with the lead, but then refers it to a local Oracle partner for implementation, said a Chicago-area reseller.

"A CEO isn't going to sign a big deal for complicated software with someone in Mississauga they've never met," the partner said. "They want someone local, someone's throat they can choke if something goes wrong."

Oracle Direct: Channel friend and foe

Another VAR in the upper Midwest said partners always walk a fine line with both Oracle field reps and Oracle Direct telesales people.

"With Oracle Direct versus Oracle field, it's kind of like keeping your friends close and enemies closer," he said. "With an Oracle field rep, it's easy for me to grab him by the throat if he tries to steal business. I can't do that with some OD guy in Toronto or Boston or California."

The perennial issue is that Oracle channel reps and Oracle Direct employees are there for a short time and move on, the partner added.

"It's churn and burn for them, but meanwhile we're here dealing with the same customers year after year," he said. "We can't burn them like Oracle sales can," said this partner.

The Oracle inside sales people care about their "number, their quota and that's it," he said. "They'll do what it takes to hit that number in order to get their compensation. Then they move on."

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