Oracle Layoffs: Tech Giant Cuts Jobs in Cloud Infrastructure Unit Amid AI Spending

Oracle Layoffs: Oracle Corp. is cutting jobs in its closely watched cloud unit, the latest company taking steps to control costs amid heavy spending on AI infrastructure. Impacted workers were told this week that their roles were eliminated, according to people familiar with the matter.

Some of the reductions were related to performance issues, and the unit continues to hire, two of the people said. An Oracle spokesperson didn’t respond to multiple requests for comment.

The full scope of reductions couldn’t be determined. The cuts were first reported by DatacenterDynamics, an industry news publication.

Many tech giants have sought to deal with the surging costs of AI by reducing expenses in other parts of the business. Microsoft Corp. has cut some 15,000 roles this year. Amazon.com Inc. and Meta Platforms Inc. have also axed jobs.

Oracle’s stock is near an all-time high on momentum in its cloud unit. Last month it inked an unprecedented deal with OpenAI for about 4.5 gigawatts of data center power in the US. Still, the company is on the hook for tens of billions of dollars to build out increasingly large server farms to meet demand. Its free cash flow was negative in the fiscal year that ended in May.

In a June filing, Oracle said that it periodically makes changes to its workforce due to strategy changes, reorganizations or performance issues. “These types of restructurings have resulted, and may in the future result, in increased restructuring costs and temporarily reduced productivity while employees adjust to the restructuring.”