Internet & Tech

The decoupling continues

Oracle shuts R&D unit in China, shedding 900 staff as the tech war escalates


On Team USA: Larry Ellison

What do you get if you tip some dried fish into a pot of gently boiling frogs? In China, the answer is an unappetising dish of late 30-something ex-Oracle employees – according to the firm’s former Chinese engineers. “We were like warm boiled frogs at Oracle,” one told Sina Finance.

The US software company’s decision to lay off over half of its China-based R&D staff has left many of them in a bit of a stew and stirred up plenty of media headlines in the process. Many news outlets attribute the job losses to the ongoing Sino-US trade and tech spats. It follows another recent announcement by Qualcomm that it has shuttered a China joint venture (see WiC450).

However, the software engineers involved have far more prosaic concerns. And these have generated a second wave of articles about the differences between life at a foreign tech company and a Chinese one.

And life is a particularly apposite word in this case because what worries many of Oracles’ 900 or so redundant employees is how they will be able to cope with working at a Chinese tech company.

An ex-engineer explained to Sina how employees appreciated Oracle’s efforts to give them a work-life balance. By contrast, they now fear the punishing long hours of many Chinese tech firms, which have often cultivated a ‘996’ work culture, or one that encourages staff to clock in hours of 9am to 9pm six days a week (see WiC449).

A contrasting fear is not being able to find a new job at all. The average age of the Oracle staff members is 37 and in softwareland that makes them ‘seniors’ in age. As one netizen joked, “a friend of a friend works at Oracle and says it’s like a plush nursing home”.

One Oracle employee called Lin Bo told Sina Finance: “Once I reached 35, I started to feel like a salted fish.”

That said few netizens have voiced much sympathy for the redundant employees, instead expressing envy of their severance packages. For the average employee, this will amount to six months salary for every year employed.

However, the base amount will be capped at three times Oracle’s average salary in Beijing. This penalises higher earners, who will also lose out as they are also being forced to sign severance packages before stock options vest in June.

Some have retaliated by demonstrating outside the company’s R&D centre in Beijing. “Keep politics out of technology,” read one banner. “I need to pay for my kids to go to school,” stated another.

Oracle’s remaining 700 or so R&D staff are expected to lose their jobs during a planned second wave of redundancies in July. In some ways, it should not have come as a surprise. As we reported in WiC353, Oracle previously laid off 200 of its China-based R&D staff in January 2017.

They were quick to protest then as well, believing they were early victims of the Trump administration’s growing ‘America First’ stance. The company’s co-CEO, Safra Catz, had also just left to join Trump’s transition team.

Oracle’s billionaire founder, Larry Ellison, has had plenty to say about the Sino-US tech war recently too. The hard-driving tycoon grew up on the gritty South Side of Chicago and considers Chinese military strategist Sun Tzu his business inspiration. During a court case a decade ago, one witness reported that Ellison kept a copy of Sun Tzu’s Art of War on his bedside table. And it is the military implications of the tech war which currently worry Ellison the most. In an interview with Fox News last autumn, he said that he was most definitely on “Team America” and he added: “If we let China train more engineers than us, let Chinese technology companies beat our technology companies. Then we are not far from the day when our military technology is also behind.”

By closing his Beijing R&D centre he is doing his bit to head that day off…

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