Oracle cuts over 150 roles in cloud division as AI costs rise

Oracle has cut jobs in its cloud division to manage rising AI infrastructure expenses.

More than 150 roles were affected in the Seattle area, the main hub for Oracle’s cloud operations. Some reductions were linked to performance issues, though hiring in the unit continues.

The exact total number of job cuts has not been disclosed.

The company recently signed an agreement with OpenAI for about 4.5 gigawatts of US data center power, but faces significant costs building new server farms.

Oracle also reported negative free cash flow for the fiscal year ending May 2025.

Other major tech firms, including Microsoft, Amazon, and Meta, have also cut jobs this year amid rising technology expenses.

Oracle announced last year it would move its headquarters to Nashville and now lists more open roles in Tennessee than any other state.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Tech giants are cutting profitable divisions to fund AI infrastructure

Oracle’s layoffs reveal a pattern where companies are reducing headcount in growing business units to redirect capital toward AI investments.

Despite Oracle’s cloud revenue surging 27% year-over-year with Oracle Cloud Infrastructure revenue jumping 52%, the company still cut hundreds of jobs in this successful division 1.

This aligns with Microsoft’s strategy, which laid off 9,000 employees while committing $80 billion to AI infrastructure, representing about 4% of its 228,000-person workforce 2.

These decisions indicate that companies view AI spending as critical enough to justify reallocating resources from profitable operations to fund future AI capabilities.

Oracle’s partnership with OpenAI, securing a 4.5 gigawatt power agreement for data centers, highlights the scale of infrastructure investment influencing these workforce adjustments 1.