Oracle has initiated a second round of large-scale layoffs this fiscal year. Some employees received an email signed by "Oracle Leadership" at 6 AM local time, with wording nearly identical to the one sent on March 31: due to current business needs and broader organizational adjustments, positions are being eliminated, and today is the last working day. Some employees lost access to federal login, Slack, and ID badges before the formal email arrived.

The company has not disclosed the number of layoffs in this round. As of May 31, the global full-time workforce was approximately 141,000, down from about 162,000 a year ago, a decrease of about 21,000 or 13%; approximately 49,000 in the U.S. The annual report states that the adoption and deployment of artificial intelligence in operations has already led to and may continue to lead to a reduction in workforce. Restructuring costs have been increased from the original plan of about $2.1 billion by $700 million to approximately $2.8 billion, with nearly $2 billion already spent, including severance. The U.S. severance plan is about four weeks of base salary plus one week for each year of service.

On the other hand, capital expenditures have surged. Recent quarterly capital expenditures were $28.5 billion, compared to $8.5 billion in the same period last year; the guidance for capital expenditures for fiscal year 2027 remains at $90 billion to $95 billion. The company is borrowing to expand cloud and data center services for clients like OpenAI and Meta. The new CFO stated in an all-hands meeting that the focus should not be on "doing more with fewer people," but rather on selectively spending and cutting processes that do not help clients. The product engineering teams in the U.S. and Bangalore, Hyderabad, India, have been identified as impacted areas.

The process has become streamlined. Around 4 AM, the system failed, collaboration software was cut off at 5 AM, and emails were sent at 6 AM, with work halted for the day, followed by a request to submit personal email addresses to receive DocuSign severance documents. The March round of layoffs affected employees in the U.S., India, Canada, Mexico, and Uruguay. Tracking websites indicate that approximately 196 tech companies have laid off over 119,000 employees this year. Amazon and Meta have also reduced staff while ramping up artificial intelligence infrastructure.

This is not a contraction following a performance collapse. Oracle is signing large computing power contracts while clearing out traditional software delivery and mid-level coordination positions. Those remaining in the organization are closer to cloud delivery, training, and inference clusters; those cleared out are positions that can be automated by models and processes. Severance payments buy speed, not a transition period.

The market mechanism is converting total wages into capital expenditures. The buyers are company finances looking to immediately cut off access and reduce recurring labor costs; the sellers are engineers who have already secured visas and settled their families in the Bay Area or Bangalore. The beneficiaries are data centers, chips, and cloud contracts; the pressured are application layer programmers and airline ticket counters for return flights. Funds are flowing from payroll to land, electricity, and GPUs, with layoff emails serving merely as settlement receipts.

Source: Public Information