The CIO report, citing investment bank TD Cowen research report, said the Oracle layoffs would mean the company gaining $8 billion to $10 billion in free cash flow. Oracle is also mulling a sale of its health-care software unit, Cerner, which it acquired for $28.3 billion in 2022.
Oracle is yet to issue a statement.
The development come as multiple US banks have pulled back from Oracle-linked data-centre project lending. “Both equity and debt investors have raised questions regarding Oracle’s ability to finance this buildout,” the research report said.
“Multiple Oracle data-center leases that were under negotiation with private operators struggled to secure financing, in turn preventing Oracle from securing the data-center capacity via a lease,” the report said.
What lies ahead?
Oracle is pursuing several strategies to reduce its capital needs.
The company has started requiring 40% upfront deposits from new customers, TD Cowen said, effectively asking clients to help fund the infrastructure buildout.
It’s also exploring “bring your own chip” (BYOC) arrangements where customers would supply their own hardware, shifting capital requirements off Oracle’s books, according to the report.
Also Read: Oracle Financial shares gain after revenue growth returns to double digits after four quarters
Meanwhile, shares of Oracle Financial Services Software Ltd., a subsidiary of Oracle Corporation based in Mumbai, gained in early trade on Thursday, January 22, in response to the company's third quarter results that were reported after market hours on Monday, January 19.
Net profit at the end of the December quarter stood at ₹606.9 crore, compared to ₹541.3 crore in the year-ago period. Its profit before tax was at ₹857.4 crore in the third quarter compared to ₹770 crore in the previous year.
