Oracle layoffs: Tech major Oracle is planning for a massive job-cut drive. According to CIO, which cited a research report by investment bank TD Cowen,
the company will likely slash up to 30,000 jobs to pay for its AI data centres. According to the report, the move comes as US banks pull back from funding Oracle’s large AI data-centre expansion, making it harder and costlier for the tech giant to secure capital. It added that the company will also be selling some of its activities. However, Oracle has not issued any official comment so far.
Oracle Likely To Sell Parts Of Its Business
The report said that the company is considering cutting between 20,000 and 30,000 jobs and may also look at selling parts of its business, including Cerner, the healthcare software firm it bought for USD 28.3 billion in 2022.
“These steps come as multiple US banks have pulled back from Oracle-linked data-centre project lending,” TD Cowen said in a research report. The bank added that “both equity and debt investors have raised questions regarding Oracle’s ability to finance this buildout.”
TD Cowen said the possible job cuts alone could free up USD 8 billion to USD 10 billion in cash, money Oracle urgently needs right now.
Why is Oracle Mulling Job Cuts?
The CIO, citing TD Cowen’s estimates, said that Oracle’s infrastructure commitments now require around USD 156 billion in capital spending. That number alone has made lenders nervous. US banks, once willing partners, are stepping away, and the impact is already visible.
As banks retreat, borrowing costs for Oracle have jumped. TD Cowen said lenders have roughly doubled the interest rate premiums they charge the company for financing data-centre projects since September.
Last year, a Reuter’s report, citing a person familiar with the matter, said that Oracle was in talks with Meta for a multi-year cloud computing deal worth about USD 20 billion, underscoring the social media giant's drive to secure faster access to computing power.
The Reuters report added that Oracle would provide Meta with computing capacity for training and deploying AI models, in addition to Meta's existing cloud computing providers.
Last October, Oracle announced that leading global system integrators and partners have committed a collective investment of over USD 1.5 billion in its new AI data platform, including in training and development of use cases and solutions, PTI reported.
Oracle said it has been working with several global partners to get them ready for the AI data platform launch, the PTI report said.
The report further added that the US-headquartered software giant said its partners include leading names such as Infosys, LTIMindtree, Cognizant, Accenture and KPMG, among others.
