Oracle is expected to lay off thousands of staff next week at it officially begins the process of digesting former rival PeopleSoft.

An Oracle spokesman said the company will announce the size of the new organisation on Friday. CEO Larry Ellison sent an e-mail to PeopleSoft employees last month, soon after the $10.3 billion acquisition deal was announced, warning them of forthcoming cuts.

Analysts expect the cuts to go deep: Piper Jaffray's Tad Piper expects Oracle to cut at least 4,500 jobs now, and ultimately up to 6,000. Including the 11,700 employees from PeopleSoft, Oracle's total headcount is around 54,500.

Layoffs inevitably follow big mergers. PeopleSoft cut 1,000 positions following its 2003 acquisition of JD Edwards, and HP shed more than 17,000 jobs after swallowing Compaq. Oracle has not commented on which departments will bear the brunt of its cuts.

The company is also preparing to announce broad organisational changes. Applications head Ron Wohl is expected to be replaced, as Oracle defines a strategy for both its PeopleSoft and Oracle products. In his e-mail to PeopleSoft employees, Ellison said Oracle expects to retain distinct development and support organisations for PeopleSoft's Enterprise, EnterpriseOne (formerly JD Edwards) and World software lines.

Further details will be available on Tuesday at the company's first post-merger customer event.