Oracle, once the dominant force in the database industry, is undergoing a painful transformation. According to Qiankemeng, citing foreign media reports, Oracle officially launched a large-scale layoff on March 31 local time, affecting thousands of people, mainly in the United States and India.

Layoffs

This round of layoffs is seen by the outside world as an unavoidable move for Oracle to alleviate its "cash flow crisis." To keep up with the wave of generative AI, Oracle has recently taken on a huge debt to expand its AI data centers, but heavy interest pressure and fierce market competition have led to a 26% drop in its stock price this year.

Layoffs Free Up Cash Flow to Fill the "Huge Gap" in AI Infrastructure

According to analysis from TD Cowen, if Oracle wants to maintain its current pace of expansion, it may need to cut 20,000 to 30,000 employees, thereby freeing up $8 billion to $10 billion in free cash flow annually.

  • Debt Pressure: In January this year, Oracle announced plans to raise $50 billion in debt and equity financing to support its AI infrastructure construction.

  • Restructuring Costs: Regulatory filings show that restructuring costs for this fiscal year are expected to increase by $500 million, suggesting that the scale of layoffs may further expand.

  • Job Cuts: Several employees confirmed on social media that they had received termination emails, with the reason being "position cancellation after evaluating current business needs."

Although Oracle is desperately building data centers that support AI workloads, in the cloud computing sector, its market share still lags far behind Amazon AWS, Microsoft Azure, and Google Cloud. The rise of generative AI has not only brought opportunities but also put Oracle's core business at risk of being "downgraded" by technological gaps.

OracleCurrently, Oracle's situation can be described as "borrowing money to buy a shovel": paying high interest to purchase NVIDIA chips on one hand, and cutting labor costs to balance the books on the other. Oracle's current situation reveals the harsh truth of transformation for old-tech giants: AI is not only an engine of productivity, but in the short term, it is also a "crusher" of financial statements.