Oracle’s shrinking campus in Redwood City…
Oracle (ORCL) filed its 10K earlier today and one of the things that quickly jumped out at me (thanks to 10KWizard’s Compare Wizard feature) was how much its Redwood City headquarters had shrunk in the past year.
In last year’s 10K, the company said that its headquarters facility in Redwood City was 3.8 million square feet. But in the current K, that number fell by nearly 50% to 2 million square feet. In the same paragraph, the company notes that due to restructuring and M&A, the company has shed about 400,000 square feet in the past year, but even assuming that all of that space was in Redwood City, that still leaves about 1.4 million square feet unaccounted for.
The answer appears to be that most of that space has been filled outside the U.S., at least based on Oracle’s headcount, which showed 28,079 employees in the U.S. and 56,154 internationally. That’s about 10,000 more employees than in fiscal 2007, when there were 25,990 and 48,684 employees respectively.
Unfortunately, unlike some other companies, Oracle doesn’t provide breakdowns for either space or employees by country, so the only option is to piece different footnotes — commitments and contingencies, restructuring costs, and a few other things — in the filing together to get a reasonable picture.
So you have a shrinking headquarters, a rising headcount, especially overseas, and a big bump in the amount of non-headquarters space occupied: to 17.9 million square feet both in the U.S. and overseas, compared with 13.5 million last year (presumably a good chunk of that was from the BEA Systems deal). And rent expenses have also jumped sharply — to $276 million last year, compared with $224 million the year before, though income from subleases has also jumped sharply to $57 million from $32 million a year earlier.
Still, it shouldn’t take this kind of detective work to get the type of basic details that IBM (IBM), an Oracle competitor, provides in a much more digestible way.
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July 2nd, 2008 at 11:42 am
I certainly can’t speak on this topic from a position of authority, but as a current Oracle employee and a former IBM employee I can throw out a thought or two. First, IBM is not likely to have any continental US office space management issues to even care about considering the “boutique” locations of so many of their offices. What with Burnett Rd (Austin, TX, but is out in the boonies), Rochester, MN (land is pretty scarce in central Minn) and the out-of-way sprawling RTP campus they just don’t have the same concerns Oracle has. Second, your suspicion that “most of that space has been filled outside the US” would not raise an alarm to most folks who realize this is a global company. However, in spite of the fact that I don’t have the real numbers (because I don’t really care about this stuff), I do know of some very useful space picked up in the Hyperion acquisition. I would think that other acquisitions may have also included at least some space. I couldn’t imagine Oracle buying a company that consisted solely of a website and a post office box.
July 2nd, 2008 at 4:16 pm
It’s been about 10 years since I was immersed in IBM, but they used to have quite a bit of real estate including several million square feet in Dutchess and Ulster counties in not-quite upstate New York. As for the movement of workers, I didn’t mean for it to raise alarm and it certainly shouldn’t be all that surprising to anyone in the tech sector.
July 7th, 2008 at 7:53 pm
Considering the fluctuations in real estate prices, I would imagine that these would contribute significantly to standard Gains. Many legacy companies in CA have a large set of assets in the form of real estate. Unless Oracle leases these, I would be surprised if anyone would consider them not “significant” enough to report on.