Oracle has lobbed 21,000 workers overboard while promising AI will somehow justify the expensive bloodletting.
The database and cloud outfit said its headcount shrank by about 13 per cent in its previous fiscal year. By the end of May, Oracle had about 141,000 full-time staff, down from 162,000 a year earlier.
The outfit reported $1.84 billion in severance and other restructuring costs for the past fiscal year. Oracle has been cutting jobs across its business lines while chasing an AI-focused reorganisation, according to the Wall Street Journal . The Austin, Texas-based company said it already has a restructuring plan in place and may keep trimming.
“The adoption and deployment of AI technologies across our operations have resulted, and may continue to result, in reductions to our workforce,” the company said, adding that it could launch fresh restructuring plans.
Oracle said it had made significant investments in AI initiatives as it stuffs the technology into its product offerings. The outfit has been pouring billions into its AI data centre build-out, because apparently no one is allowed to be a software company now without hoarding GPUs.
The company expects to spend a net $70 billion this fiscal year. That is more than the $55.7 billion it spent on capital expenditure in the previous fiscal year.
Oracle did admit the strategy might go pear-shaped. “If our competitors’ AI products achieve higher market acceptance than ours, or if we incur costs higher than expected to build and support our AI products, we may fail to recoup our investments,” Oracle said.
The company said that failing to keep shovelling cash into AI products could leave it behind the curve. In other words, it fears spending too much on AI, but fears not spending enough even more.
Its shares were down five per cent, suggesting the market was not dazzled by the grand plan to replace workers, spend more and hope AI makes it all work.
