Oracle, a major technology company known for its database software, cloud infrastructure, and enterprise applications, has laid off an unspecified number of workers in its cloud division as part of efforts to offset soaring costs tied to artificial intelligence infrastructure.
Bloomberg, citing anonymous sources, reported that staff were informed of the cuts earlier this week, with some layoffs linked to performance issues. Although these layoffs cut certain positions, the company is not pulling back from the cloud market. According to the report, the changes are part of a targeted restructuring, aimed at replacing some roles with new hires whose skills better match Oracle’s growing focus on AI infrastructure.
The cost-cutting measures come as Oracle channels multibillion-dollar investments into AI capabilities. Recall that in July 2025, the tech giant announced a landmark agreement with OpenAI, under which large volumes of OpenAI’s data will be processed using Oracle’s infrastructure.
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This deal extends a pre-existing relationship between OpenAI and Oracle, which includes earlier investments and collaborations on AI supercomputing and research. The announcement comes as big tech companies are pouring billions into new data centers and power agreements to sustain the growth of AI and power future models.
India, home to a substantial portion of Oracle’s global workforce, is expected to significantly feel the impact of the layoff. As of 2024, Oracle India employed approximately 28,824 people, part of the company’s global headcount of around 162,000 in 2025. The country serves as a key hub for software development, cloud services, and technical support, making the layoffs a substantial hit to the local talent base.
Strategically, the move underscores the challenges Oracle faces in the global cloud market. The company has been expanding aggressively in the sector, but its exclusion from the Chinese market driven by U.S. political restrictions has closed off a critical growth arena.
This lockout limits transaction volume, erodes cost efficiency, weakens Oracle’s competitive position against AWS, Azure, Alibaba Cloud, and Tencent Cloud, and cuts off potential partnerships with Chinese tech giants like Huawei and Baidu that dominate the country’s infrastructure.
Notably, Oracle’s recent move follows a broader trend among technology companies that are offsetting the rapidly rising costs of AI infrastructure by trimming headcount. The AI race is no doubt intensifying, with companies like OpenAI, Google, Meta, and xAI competing to build the most advanced models. This creates a feedback loop where firms must continuously invest in larger, more powerful systems to stay competitive, driving costs higher. This urgency, with users noting that companies are “betting the farm” on AI to avoid being left behind, referencing the rapid pace of innovation and the fear of obsolescence.
To fund these massive investments, many tech companies are reducing headcount, particularly in non-AI-related divisions. This approach allows them to reallocate budgets toward capital-intensive AI projects while maintaining financial discipline in a high-interest-rate environment. Tech giant Microsoft has cut around 15,000 jobs this year, while Amazon and Meta platforms have also scaled back staffing as they redirect resources towards AI initiatives.
Interestingly, the escalating financial demands of AI development, driven by the need for vast data centre capacity and computing power, are forcing even the largest firms to balance their spending priorities.