Oracle is planning to eliminate thousands of jobs across various divisions as it manages a cash shortfall stemming from significant investments in artificial intelligence (AI) data centres. The job reductions are anticipated to begin as early as this month, according to sources familiar with the confidential plans. Some of the cuts will target roles that Oracle anticipates will be less critical due to the increasing adoption of AI technologies within the company. Oracle, led by Chairman Larry Ellison, is undertaking a major expansion of its data centre infrastructure to support AI workloads for clients, including OpenAI.
Oracle, traditionally known for its database software, has been actively shifting its focus towards cloud computing and AI in recent years. The company aims to establish itself as a strong competitor to industry leaders such as Amazon and Microsoft in the cloud computing sector. This strategic shift necessitates substantial investments in data centre infrastructure to meet the growing demands of AI-driven services.
However, Wall Street analysts project that these extensive data centre expenditures will likely result in negative cash flow for Oracle’s cloud unit in the coming years. The company’s spending is not expected to generate returns until 2030. To address these financial pressures, Oracle announced last month its intention to raise up to $US50 billion ($72 billion) this year through a combination of debt and equity offerings.
