Oracle has reportedly cut more than 100 jobs in its cloud division, with the move linked to the rising cost of building AI infrastructure. The affected employees were informed this week, according to Bloomberg. While the company hasn’t confirmed the exact number, the job cuts are said to be partly tied to performance reviews.
Interestingly, Oracle is still hiring in other areas of its cloud business, just not in all locations. The job cuts have largely hit Oracle’s long-standing cloud hub in the Seattle area. As per reports, the company is shifting more of its hiring focus to Tennessee, where it moved its headquarters last year. The move is seen as part of a broader cost-balancing strategy, keeping AI investments on track while optimising other expenses.
Why Is This Happening Now?
Building AI infrastructure is no small investment. From data centres to server farms, the costs are in the billions. In June, Oracle signed a massive deal with OpenAI to provide around 4.5 gigawatts of US data centre capacity. These are the kinds of commitments that require companies to reallocate resources and, unfortunately, that sometimes means trimming headcount elsewhere.
Other tech giants are facing the same challenge. Microsoft has cut about 15,000 jobs this year, while Amazon and Meta have also reduced staff to offset AI-related expenses.
Oracle’s Cloud Business
Oracle’s cloud business is still one of the bright spots for investors, however, the heavy spending on AI infrastructure has impacted its cash flow, with the company reporting negative free cash flow for the fiscal year ending May, the report added.
In a June filing, Oracle noted that it periodically makes workforce adjustments due to strategy changes, reorganisations, or performance issues. The company also pointed out that such changes can temporarily affect productivity while teams adjust.
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