Oracle employees have been warned to expect potential job cuts in the coming weeks, as the company plans to reduce its payroll before the start of its second quarter on September 1. According to people familiar with the plans and an internal document, the cuts could reach double-digit percentages on some teams, with managers already submitting lists of affected employees.
The company’s urgency to reduce its payroll is driven by its desire to cut costs before the start of the new quarter. This approach is not new to Oracle, as it has previously used a similar method to inform employees of job cuts. On March 31, employees received emails from Oracle Leadership at around 6 am local time, informing them that their roles had been eliminated. System access was also cut off on the same morning, affecting employees in the US, India, Canada, and Mexico.
Previous Job Cuts
Oracle has already cut 21,000 jobs in the fiscal year that ended on May 31, representing a 13% reduction in its workforce. The company’s headcount decreased from 162,000 to approximately 141,000 employees. The job cuts resulted in significant restructuring costs, which jumped to $1.8 billion from $374 million in the previous year.
The adoption of AI across Oracle’s operations has been cited as a reason for the workforce reductions. In its annual filing, the company stated that AI adoption has already led to job cuts and may continue to do so in the future. Every job cut is expected to provide Oracle with more room to invest in building data centers, a key area of focus for the company.
Financial Context
Despite the job cuts, Oracle’s revenue is climbing, with a 17% increase in the last fiscal year. The company’s cloud infrastructure business grew 77% during the same period. Net income also jumped 95% to $6.13 billion in a recent quarter. However, Oracle’s stock has been affected by concerns over its debt load and the potential impact of AI on traditional enterprise tools.
CEO Clay Magouyrk has pointed to $553 billion in remaining performance obligations as proof that demand for AI compute is outpacing supply. Chairman Larry Ellison has dismissed concerns about the impact of AI on traditional enterprise tools, stating that the “SaaSpocalypse” would be someone else’s problem.
Previous Layoffs’ Aftermath
The March layoffs have left a residue that Oracle has not yet cleared. Over 600 former employees signed a letter on April 17 seeking higher severance, extended healthcare, H-1B support, and stock acceleration. Oracle replied that it would handle concerns individually, rather than as a group. A survey of 272 laid-off workers found that 62% were over 40, and 27% had restricted stock that was due to vest within 90 days, which vanished when they left the company.
In India, severance in the earlier round broadly followed the N+2 formula, with unvested RSUs forfeited. The next batch of emails, potentially arriving at 6 am, is the only detail still unknown, leaving Oracle employees to wait anxiously for news about their job security.
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