Oracle Layoffs Cloud Division Employees Amid AI Spending Surge

Oracle has reduced over 150 positions within its cloud division, primarily based in Seattle, the hub for the unit. While some redundancies have been linked to performance concerns, hiring in certain roles continues, as per the news reports. The company’s spokesperson did not respond to repeated media queries, and the precise scale of the layoffs remains undisclosed.

The decision aligns with similar measures taken by other major technology firms facing rising artificial intelligence (AI) infrastructure expenses.

Industry-Wide Cost Management Amid AI Growth

The surge in AI-related infrastructure costs has prompted technology companies to cut jobs in other areas of their operations. This year alone, Microsoft has let go of around 15,000 employees, with Amazon and Meta also executing significant workforce reductions. Despite these layoffs, Oracle’s cloud business remains a key growth driver, and the company recently signed a landmark agreement with OpenAI for approximately 4.5 gigawatts of US data centre capacity. 

However, substantial investment commitments towards large-scale server facilities have led to a negative free cash flow for the fiscal year ending May.

Strategic Workforce Restructuring

As per news reports, in a June filing, the company explained: “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.” 

The firm periodically adjusts its workforce in response to changes in strategy, organisational structure, or performance evaluations.

Read More: TCS Layoffs History: From Small Exits to 12,000 Job Cuts!

Conclusion 

Oracle’s layoffs reflect a wider tech trend of trimming roles to offset soaring AI infrastructure costs, even as its cloud business expands and stock nears record highs, backed by major deals like its multi-gigawatt data centre pact with OpenAI.

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