Oracle eliminated about 21,000 jobs last year as it accelerated the development of its artificial intelligence business and expanded investments in data centers.
The move follows a broader trend in the technology sector: companies have been devoting hundreds of billions of dollars to building infrastructure for AI. Meta and Amazon have also cut thousands of positions in recent months in an effort to redesign their structures, gain agility and compete with native AI startups.
Based in Austin, Texas, Oracle reduced its headcount by approximately 13% in the last fiscal year, according to its most recent annual report. At the end of May, the company had around 141,000 full-time employees, compared to 162,000 at the end of the previous year.
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The company began the staff reduction process in March, according to The Wall Street Journal.
Oracle also booked $1.84 billion in severance pay and other costs related to the restructuring. The company stated that it already has a restructuring plan in progress, through which it has made – and will continue to make – adjustments to its staff.
“The adoption and deployment of AI technologies in our operations has resulted and may continue to result in reductions in our headcount,” the company said, adding that it may launch further restructuring plans in the future.
Oracle said it has made significant investments in AI initiatives as it incorporates the technology into its product portfolio. At the same time, he recognized the risks of a strategy heavily anchored in AI.
“If our competitors’ AI products achieve greater market acceptance than ours, or if we incur higher than expected costs to develop and sustain our AI products, we may not be able to recoup our investments,” he said.
On the other hand, the company highlighted that, if it does not continue to invest significant resources in AI products, it could lose competitiveness.
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In data centers focused on AI, Oracle has been allocating billions of dollars. The company estimates net spending of US$70 billion this fiscal year, up from US$55.7 billion in capital expenditures in the previous year – a portrait of the high cost of the AI boom.
Oracle gained “darling” status on the topic last year after closing AI-related contracts totaling hundreds of billions of dollars, including an agreement in which OpenAI is expected to buy around US$300 billion in computing capacity over approximately five years, according to a previous WSJ report.
More recently, however, investors have begun to assess more rigorously whether the high investment commitments made by large technology companies are sustainable in the long term. Oracle has already warned that the financing needed to expand its presence in data centers tends to put pressure on profit margins. Source: Dow Jones Newswires.
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*Content translated with the help of Artificial Intelligence, reviewed and edited by the Broadcast editorial team, Grupo Estado’s real-time news system
