Oracle plans to lay off thousands of employees this month due to financial pressures from its massive investment in artificial intelligence (AI) data centers, according to a Bloomberg report. Larry Ellison's company signed a $300 billion deal with OpenAI to support Project Stargate, which aims to make the United States a major power in the AI industry.
The company is facing a cash flow crisis after committing to huge spending to expand its cloud infrastructure to meet the demands of clients such as OpenAI, xAI and Meta. Some positions will be cut as they are expected to shrink due to automation using AI. Oracle is also slowing or freezing hiring in its cloud division. At this point, Oracle has 162,000 full-time employees.
Oracle's fortunes have also been shaken by its pursuit of the AI trend. Last year, Ellison briefly overtook Elon Musk as the world's richest person after Oracle's cloud services revenue was expected to grow 77% last year. This did not happen and the company's shares fell again.
Ellison used this increase in wealth to help his son David Ellison take over Paramount, Warner Bros. Discovery at a value of $110 billion and he bought the US TikTok business from Bytedance.
