Oracle cuts up to 30,000 jobs despite record profits

On Tuesday morning, Oracle employees across the United States, India, Canada, Mexico, and other countries received an email from “Oracle Leadership” informing them of their immediate termination.

The email was short and to the point. It informed employees that their jobs were gone due to a company-wide restructuring. The day they received the email was their last day of work. Details about severance pay would be sent later through DocuSign.

There was no phone call from HR, no discussion with a supervisor, and no prior notice. Just an email, sent around 6 a.m. EST, that terminated careers that had lasted for years.

Oracle has not confirmed the number of employees affected by layoffs, but TD Cowen estimates between 20,000 and 30,000 workers will be cut, representing about 18% of Oracle’s 162,000-person global workforce. The higher estimate would mark the largest layoff in Oracle’s history.

As soon as the emails were sent, access to internal systems was cut off. Impacted employees immediately shared screenshots and reactions on Reddit’s r/employees of Oracle and the professional forum Blind. Reports came in from multiple countries before most people had even finished their morning coffee.

According to the BBC, Senior manager Michael Shepherd stated on LinkedIn that the layoffs impacted “senior engineers, architects, operations leaders, programme managers, and technical specialists,” emphasising that performance was not a factor. He clarified, “The individuals affected were not let go because of anything they did or didn’t do.”

Despite profits, Oracle continues to lay off tens of thousands

The situation at Oracle presents a clear contradiction. Despite reporting a massive 95% increase in net income last quarter, totalling $6.13 billion, and boasting $523 billion in contracted future revenue (a 433% year-over-year increase), it’s important to recognise that Oracle is not experiencing financial difficulties.

However, the company has borrowed a massive amount of money to invest heavily in artificial intelligence infrastructure. The company has taken on $58 billion in new debt in just two months to finance data centres in Texas, Wisconsin, and New Mexico.

Its total debt is now over $100 billion. Wall Street analysts predict that Oracle’s free cash flow will stay negative for several years, and significant profits are not anticipated until approximately 2030.

TD Cowen reports that the job cuts should save the company $8 billion to $10 billion. Oracle needs this money to continue developing its AI technology. In a recent SEC filing, the company announced a $2.1 billion restructuring plan, which includes almost $1 billion already spent, mainly on severance packages.

Employee accounts indicate that the Revenue, Health Sciences, SaaS, and Virtual Operations Services teams were most affected, with reported cuts of at least 30% in each.

Similar read: Amazon to lay off another 14,000 employees in Q2 amid aggressive AI transition

In Addition, the NetSuite India Development Centre experienced reductions across various levels in engineering, project management, and management roles.

Oracle is involved in the Stargate initiative, a $500 billion project supported by OpenAI, SoftBank, and former US President Donald Trump. This project aims to expand AI data centre capabilities throughout the United States.

Oracle’s co-founder and chairman, Larry Ellison, a prominent figure in the world of wealth, is seeing his investment in AI generate returns, which is occurring, to some degree, at the expense of numerous employee positions.

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