Kirsty Wark
Oracle has begun cutting thousands of jobs, according to a CNBC report. This step is said to be linked to the company’s strong focus on spending more money on artificial intelligence systems.
Employees who lost their jobs started getting emails as early as 6 AM EST (3:30 PM IST), telling them that their jobs had ended immediately. There was no earlier notice, no HR call, and in many cases, no message from managers – only a formal email from “Oracle Leadership.”
The Email Sent to Employees
“We are sharing some hard news about your role. After reviewing Oracle’s current business needs, we have decided to remove your position as part of a larger company change. Because of this, today is your last working day. We thank you for your effort, commitment, and the work you have done with us. After you sign your exit documents, you will be able to receive a severance package based on the plan terms. You will get an email from DocuSign with full details about your severance and final working date.”
Size of the Job Cuts
Around 10,000 employees are believed to have lost their jobs so far, one worker told the BBC on Tuesday, noting fewer active users on Oracle’s internal Slack system.
This step is part of a larger company change that could affect up to 30,000 workers worldwide, making it one of the biggest job cuts in Oracle’s history.
Michael Shepherd, a senior manager who was not affected, shared on LinkedIn that “senior engineers, system designers, operations heads, program managers, and technical experts” were among those removed. He also said these job cuts were not based on performance.
“The people affected did not lose their jobs because of anything they did or did not do,” he added.
Why Is Oracle Cutting Jobs?
These job cuts are connected to Oracle’s strong move into AI and cloud technology. Under Larry Ellison, the company is spending heavily to become a leading name in the AI race and compete with the biggest cloud companies.
This change is also about reducing costs and shifting resources into fast-growing areas like AI and cloud services. Roles that are no longer needed or can be handled by machines are being removed as the company prepares for the future.
Oracle has already been using AI tools inside the company, and leaders have said that fewer workers can now complete more tasks.
“The use of AI coding tools inside Oracle is helping smaller teams deliver better solutions to customers more quickly,” said Mike Sicilia, Oracle’s co-chief executive, earlier this month.
The news comes after a March report to the Securities and Exchange Commission where Oracle said it was setting aside another $500 million for restructuring costs.
This year, Oracle’s stock has dropped by 27% as investors consider the risks from AI competition and the effect of high spending on the company’s cash flow.
The Stargate Project and Debt
Oracle is part of the Stargate project along with OpenAI, SoftBank, and MGX. This is a $500 billion plan to build more data centers in the US to support the growing needs of AI systems in the coming years.
The company plans to spend at least $50 billion on infrastructure this year and has also taken on $50 billion in debt to meet the rising demand for AI systems. Oracle’s total debt has now crossed $100 billion, showing the large scale of its plans.
“Spending on AI systems requires a lot of money, but our business model is designed to stay profitable,” said Clayton Magouyrk, Oracle’s co-chief executive.
Severance: How Does Oracle Compare?
According to reports, employees in the US who lost their jobs will receive four weeks of base pay, plus one extra week for each year they worked at the company, up to a maximum of 26 weeks.
Oracle has followed other big tech companies in offering severance pay, but its package is seen as smaller compared to companies like Block and Meta.
Block offered 20 weeks of pay, one extra week for each year of service, a $5,000 bonus, work devices, and six months of health support. Meta provided 16 weeks of pay, plus two extra weeks for every year worked, along with six months of health insurance.
