Oracle to Slash Jobs as AI Data Centre Costs Soar
Oracle Corp. is set to eliminate thousands of jobs as part of its strategy to address a cash crunch stemming from a significant AI data centre expansion initiative. The job reductions will impact divisions throughout the company and could be enacted as early as this month, according to sources. According to sources, certain cuts will target job categories that the company anticipates will be less necessary because of AI. Under the leadership of Chairman Larry Ellison, Oracle is initiating a significant expansion of data centres designed to support AI workloads for clients including OpenAI. The company, historically recognized for its database software, has been undergoing a transformation in recent years to enhance its cloud computing division with an emphasis on AI, aiming to establish itself as a formidable competitor to industry giants Amazon.com Inc. and Microsoft Corp.
According to data, market anticipates that the expenditures by the cloud unit for data centers will lead Oracle’s cash flow to turn negative in the coming years, before the investments start to yield returns in 2030. Last month, Oracle announced its intention to raise as much as $50 billion this year through a combination of debt and equity sales. The planned reductions are anticipated to extend further than the company’s usual rolling job cuts, as stated by sources. This week, Oracle communicated internally that it would be assessing numerous open job listings within its cloud division, thereby effectively decelerating or halting the hiring process, as reported by sources familiar with the situation. Oracle has chosen not to provide a comment. As of the end of May 2025, the company employed approximately 162,000 individuals worldwide.
The individuals indicated that planning for the workforce reductions remains ongoing and may be subject to change. Oracle’s early actions as an AI cloud provider garnered positive attention from investors, resulting in a 61 per cent increase in stock value in 2024 and a 20 per cent rise the previous year. However, as costs have risen, the market sentiment towards the company has deteriorated, resulting in a 54 percent decline in shares from their September 2025 peak through Wednesday’s close. Following the report, the stock on Thursday retraced earlier gains, dropping by as much as 1.5 percent to $150.12. The significant initial expenses associated with AI have prompted reductions throughout the tech sector as firms strive to manage their financial plans. Microsoft terminated approximately 15,000 employees last year as expenditures on data centres and AI software development continued to increase.
Last week, Block Inc. revealed plans to reduce its workforce by nearly 50%, with co-founder Jack Dorsey highlighting the efficiency-enhancing capabilities of AI. In September, Oracle revealed in a filing its intention to undertake its largest restructuring to date, projected to cost up to $1.6 billion in the current fiscal year ending in May, which includes severance payments to departing employees. That was considerably larger than any other comparable plan Oracle has revealed. The company is set to reveal its fiscal third-quarter earnings on Tuesday.
