Merger nerves shake up Siebel

"Unbelievable" was the first word a Siebel employee on a cigarette break said to a colleague pulling up in a black Jeep at Siebel's San Mateo, California, headquarters on Monday morning.

But that may have just been a conversation starter; several other Siebel employees in interviews expressed little surprise at the takeover by Oracle, though they did appear a bit rattled by the news as none wanted to be named for this story. Some said they are worried about their jobs, recalling the thousands of people laid off after Oracle scooped up PeopleSoft last year.

"It was clear that somebody was going to pick us up if we didn't improve our numbers," said one Siebel employee. Siebel has been struggling financially in recent years and had been the subject of takeover rumours for some time, particularly since the departure of chief executive Mike Lawrie in April.

News of the merger spread fast. When he turned on his mobile phone this morning, one Siebel employee already had 11 messages. "I figured there was either some terrorist thing, a major accident on the freeway or something like this acquisition," he said.

The employee predicted he will lose his job. "I am not an engineer and am not a sales guy. I probably will be working somewhere else," he said.

A Siebel engineer heard of the deal from a colleague on the East Coast. He characterised the buyout as Silicon Valley tradition. "It could have been any company. It is common here for big companies to acquire smaller ones," he said. The merger will cost some people their jobs, the engineer said, adding that he doesn't fear for his position.

Several engineers at Siebel appeared to be reassured by promises from Oracle chief executive Larry Ellison earlier on Monday that Siebel's CRM technology would be the "centrepiece" of Oracle's CRM strategy going forward.

Another Siebel employee said the corporate culture integration between Oracle and Siebel should go smoothly. "I don't think there will be a big culture clash, because so many ex-Oracle people are here," he said.

One Siebel employee characterised his company's CRM product as the industry's best and that Oracle would serve as a good customer base to sell into. "It should be a good product fit," the employee said.

At Oracle's Redwood Shores headquarters, about five miles down Silicon Valley's main artery, Highway 101, employees favoured the merger, even though some expect layoffs at both companies.

"I am kind of surprised this happened so fast after the PeopleSoft takeover," said one Oracle employee who works on CRM products. "With that come layoffs."

It was no secret that Oracle was interested in Siebel. Ellison included the company in a list of takeover targets during Oracle's controversial and often contentious $10.3bn acquisition of PeopleSoft.

"I think it's a good move," said another Oracle employee in the applications division. "We'd get into their customer base."

The speed at which Oracle is picking up rivalling software makers reflects Larry Ellison's ambitions, this employee said. "Larry is moving quickly to get an overall leadership position in the application space," he said. "With the experience of PeopleSoft, I am sure this one will go well."