Oracle mulls $1bn in cost cuts, laying off thousands of employees
Two top Oracle executives are also departing in addition to the possible job cuts
Oracle is considering cost-cutting measures worth up to $1 billion, which may cause thousands of job losses by August.
Citing Oracle executives with knowledge of the matter, The Information reported last week that the job losses would disproportionately impact staff in the US and Europe.
The staff working in marketing for software systems that automate customer support and e-commerce functions are among those at the risk of losing jobs.
The firm is increasing spending in other areas, which is why the planned layoffs, which are expected to begin as soon as August, are being made.
The Information reported that two top Oracle executives will be leaving in addition to the possible job cuts.
It is said that CMO Ariel Kelman, who arrived from AWS two years ago and has been in charge of the team working with TikTok, is departing.
Juergen Lindner, senior vice president of marketing for SaaS, is another executive who is reportedly leaving. His team may be reorganised, which result in job losses.
Talk of cost-cutting and job cuts at Oracle follows a 5% increase in fiscal 2022 sales for the year ended May 31 to $42.44 billion, although its operating income of $10.926 billion was down 28% year over year.
Despite that, Oracle is in a position to spend money on acquisitions.
Last month, the firm completed the purchase of healthcare IT firm Cerner and paid a total of $28.3 billion for the business in order to strengthen its position in the healthcare technology sector.
The acquisition resulted in the addition of around 28,000 new workers to the Oracle workforce.
"Working together, Cerner and Oracle have the capacity to transform healthcare delivery by providing medical professionals with better information, enabling them to make better treatment decisions resulting in better patient outcomes," said Larry Ellison, chairman and CTO.
The anticipated cutbacks coincide with Oracle significantly investing in TikTok, the popular video app owned by China-based ByteDance, which chose the Oracle platform in 2020 as its cloud supplier.
It was a significant deal for Oracle, a leader in database software that is vying with AWS in selling cloud computing services.
"The timing of Oracle's investments for a Chinese customer while it considers cutting American jobs has irked some managers," a source told The Information.
In order to save capital until the market rebounds, a number of public firms and start-ups have declared intentions to conduct layoffs.
IronNet, a provider of cybersecurity technologies, announced last month its intention to layoff about 17% of its overall workforce by the end of the month.
According to Bloomberg, Rivian, a manufacturer of electric vehicles, is also thinking about letting go of 700 workers, or around 5% of its 14,000 workforce.
Facebook owner Meta, recently lowered its goal for recruiting engineers in 2022 to around 6,000 to 7,000, down from an early aim to hire about 10,000 new engineers, and said it would increase its expectation of existing employees in the hope some would resign.