Quick overview

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Oracle plans to eliminate thousands of jobs as part of its efforts to address a cash crunch stemming from a massive AI data center expansion. The job reductions could be implemented as soon as this month and will impact divisions throughout the company.

Some of the cuts will target job categories the company anticipates needing fewer of because of AI. Under the direction of Chairman Larry Ellison, Oracle is starting a historic data center expansion to support AI workloads for clients like OpenAI.

The company, known for its database software, has been expanding its cloud computing division in recent years with an emphasis on artificial intelligence (AI) in an effort to challenge market leader Amazon. Com Inc. and Microsoft Corp.

Wall Street predicts that Oracle’s cash flow will be negatively impacted by the cloud unit’s data center expenditures in the upcoming years, before the expenditures start to pay off in 2030.

Oracle announced last month that it would use a combination of debt and equity sales to raise to $50 billion this year.

The planned reductions are anticipated to be more extensive than the company’s usual rolling job cuts. According to people with knowledge of the move, Oracle announced internally this week that it would review many of the open job listings in its cloud division, thereby freezing the hiring process.

The company employed roughly 162,000 people worldwide. According to the people, preparations for the workforce reductions are still ongoing and may change. Investors responded favorably to Oracle’s early efforts as an AI cloud provider, and the stock increased 20 percent last year and 61 percent in 2024.