Tech giant Oracle makes 'significant' job cuts
Foto: BBC Tech
As many as 10,000 Oracle employees may have lost their jobs following a wave of layoffs that swept through the company on Tuesday. These estimates are based on a sudden drop in the number of active users on the internal messaging platform Slack, while reports of the reductions are being confirmed by numerous managers and engineers on social media. Crucially, the cuts do not stem from poor personnel performance, but rather from an aggressive strategic shift toward Artificial Intelligence. Mike Sicilia, one of the executive vice presidents, explicitly admits that AI coding tools allow smaller engineering teams to deliver complete solutions faster than before. For users and corporate clients globally, this signals a new era in Cloud Computing—Oracle plans to spend at least $50 billion on AI infrastructure this year, participating in projects such as the massive $500 billion Stargate initiative. Automation within the company already covers sales lead generation and even the construction of the giant's new website. The Oracle case is a clear signal for the technology sector labor market: AI investments are ceasing to be mere additions and are becoming cost optimization tools where algorithms are effectively replacing experienced architects and program managers. Scaling an AI-based business is occurring at the expense of the traditional employment model, prioritizing maximum efficiency with fewer hands on deck.
In the world of big tech, where the promise of automation has hung over the job market like the sword of Damocles for years, the moment of truth has arrived. Oracle, one of the world's largest providers of software and cloud infrastructure, carried out a "significant" reduction in force last Tuesday. While the company officially refuses to comment, reports from employees and data from internal systems paint a picture of a drastic structural shift: according to estimates, as many as 10,000 people may have lost their jobs.
The scale of the layoffs was noticed by the employees themselves, who observed a sharp drop in the number of active users on the internal communication system Slack. What distinguishes this round of cuts from previous ones is the direct link between operational efficiency and the implementation of artificial intelligence. The giant's management openly admits that AI tools allow smaller engineering teams to perform work that previously required significantly larger human resources.
Algorithms instead of full-time positions
Oracle's strategy becomes clear when analyzing recent statements from the company's leaders. Mike Silica, one of the co-chief executives, indicated that the use of AI-based coding tools enables faster delivery of complete solutions with less human labor. This is not just theory – the company has already used artificial intelligence to build its new corporate website and to automate service sales processes and commercial lead generation.
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The layoffs hit a broad spectrum of specialists. Michael Shepard, a senior manager at Oracle, revealed on the LinkedIn platform that the reduction included experienced engineers, architects, operational leaders, and program managers. Crucially, Shepard emphasized that these decisions were unrelated to the performance of individual individuals. "The people affected by the cuts were not let go because of anything they did or didn't do," he wrote, suggesting that we are dealing with a purely structural reorientation of the business model.
Employees describe a traumatic process: many of them received emails early in the morning informing them of the immediate termination of cooperation. A severance pay of one month's salary became the standard in this round of layoffs. Despite the brutality of the process, some former employees, like Kendall Levin, still declare faith in the direction the company is heading, which testifies to the industry's strong conviction regarding the inevitability of the transformation towards AI.
Billions for infrastructure and Project Stargate
While Oracle is reducing personnel spending, it is simultaneously aggressively increasing capital expenditures on technology. The company plans to spend at least $50 billion on infrastructure this year alone. To meet the growing demand for computing power necessary for AI, the giant has taken on debt amounting to another $50 billion. It is a risky but decisive play for dominance in the new digital era.
- Investments: $50 billion for infrastructure in the current fiscal year.
- Financing: $50 billion raised from debt for data center development.
- Partnerships: Close cooperation with OpenAI and participation in global initiatives.
- Stargate: A $500 billion project implemented jointly with OpenAI, Softbank, and MGX.
The Stargate initiative attracts particular attention. It is a massive project to build data centers in the United States, supported by, among others, the MGX investment fund (backed by the Donald Trump administration). The goal is to provide processing power for the upcoming wave of AI models, which require an unprecedented amount of energy and cooling. Clayton Magouyrk, the second of Oracle's co-chief executives, admits that scaling such a capital-intensive business in such a short time is an unprecedented event in the history of technology.
Efficiency over employment
Oracle is not alone in its rhetoric of "doing more with fewer people." Similar arguments were made this year by Mark Zuckerberg of Meta and Jack Dorsey of Block, who also carried out mass reductions. Although the tech industry has been regularly laying off workers for years, the current wave differs from previous ones: for the first time, leaders are openly pointing to AI as an optimization tool, rather than just the general economic situation.
It is worth noting that Larry Ellison, co-founder and CTO of Oracle, and his team must balance huge development spending with investor expectations. The company's shares recently recorded declines when financial results failed to fully calm fears regarding a possible bubble in the AI market. Optimizing labor costs through automation is intended to be a guarantee of maintaining profitability in a business model that is becoming extremely capital-intensive.
The layoffs at Oracle are a signal for the entire creative and engineering sector. The transformation in question is ceasing to be a theoretical threat and is becoming the foundation of the operational strategy of the largest players. The transition from hiring thousands of specialists to building powerful, automated systems managed by few, high-performance teams is becoming the new standard in Silicon Valley and beyond. Oracle, betting everything on one card in Project Stargate, is setting a direction in which technology not only supports humans but, in many key areas, simply begins to replace them in the name of speed and scale of operation.
