Oracle’s AI spending spree leaves workers paying the price
Oracle’s AI spending spree leaves workers paying the price
Oracle entered fiscal 2027 carrying the contradiction in plain sight: its workforce had already fallen by about 21,000 people, or 13%, in the year ended May 31, leaving roughly 141,000 employees before the latest cuts. At the same time, it was building heavily for AI demand, reporting $28.5 billion in first-quarter capital expenditures and maintaining a $90 billion to $95 billion annual forecast.
Then came Monday’s new layoffs. Employees received a blunt early-morning notice saying their roles had been eliminated in a broader organizational change: “As a result, today is your last working day.” Some workers said the execution compounded the shock. Seattle-based Oracle vice president Yurie Rich wrote that the company sent the notice to an inaccessible corporate account, leaving her to discover the decision after losing access to company systems: “So apparently, don’t even get the courtesy of an e-mail.”
The human account sits uneasily beside Oracle’s growth narrative. The company’s cloud-infrastructure revenue rose 121% to $7.4 billion in the first quarter, while operating income climbed 57% to $6.7 billion. Yet the cuts were intended to lower payroll as Oracle takes on debt to expand data centers, according to a person familiar with the strategy.
On Tuesday, newly installed CFO Hilary Maxson addressed employees in an all-hands meeting without directly discussing the layoffs. She rejected the familiar corporate shorthand of “doing more with less,” saying Oracle instead needed to simplify processes and direct resources where they would have the greatest effect. Co-CEO Mike Sicilia likewise urged staff to ask how their work delivered “a better outcome for a customer.”
For those leaving, the financial cushion is limited: four weeks of severance plus one additional week per year of service, with Oracle’s standard plan previously capped at 26 weeks. The message is clear enough: Oracle sees focused investment. Its former employees see the bill coming due.
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