Oracle likely to cut about 30,000 jobs to finance data centre buildout

Oracle may take drastic cost-cutting steps to improve its cash flow stress. In the cost-cutting move, the software giant may reduce its workforce by 20,000 to 30,000 for AI data-centre expansion. The job cuts is subjected to generate $8 and $10 billion in cash flow. 

Alongside the job cuts, Oracle may also plan to sell some businesses in the health-care software unit, which was acquired back in 2022 for $28.3 billion, according to CIO report, citing investment bank TD Cowen’s assessment. The decision is reportedly coming as US banks are becoming more cautious about lending money for Oracle-related data-centre projects. 

TD Cowen stated, “Both equity and debt investors have raised questions regarding Oracle’s ability to finance this buildout.”

If rumours surrounding the layoffs are true, then it will be Oracle’s biggest cost-cutting step, after 10,000 job cuts back in 2025. It was highlighted that employees who manage data-centre operations or business areas are expected to be most affected as part of the company’s restructuring plan.

In addition to employees, the drastic measure will also affect how customers buy and use Oracle services. It is suggested that new customers may be asked to pay 40% fees in advance. 

Customers are also likely to face delays or limited capacity, as Oracle slows new data-centre investments, driving firms to postpone cloud deployment plans. Furthermore, the company is also exploring “bring your own chip” (BYOC), where customers will be supplying their own hardware.

Increase in wave of AI-linked tech layoffs

The plan for 30000 job cuts by Oracle reflects a brutal new reality of tech layoffs in recent months. The “AI Pivot” is reportedly driving tech companies to cut costs as the technology is either replacing jobs or requiring higher investment. Several tech giants, including Amazon, Meta, and Google has announced major layoffs, creating fear in the job market.