Oracle's massive layoff signals AI-led threat for software firms; 12-15,000 lose jobs in India

E-PaperSubscribeSubscribeEnjoy unlimited accessSubscribe Now! Get features like American technology major Oracle Corporation's decision to part ways with 30,000 employees globally-almost 19% of its total workforce-has sent shockwaves through the organization. It has also deepened concerns about the sustainability of software product companies in the era of artificial intelligence (AI) and automation. Bengaluru: A view of the US-based IT firm Oracle building, in Bengaluru, Wednesday, April 1 (PTI)Employees across sales, human resources, engineering and developer roles faced the axe after receiving an email from the company's leadership at 6am (in all time zones) on Wednesday, citing "broader organisational change". The company, which follows a June-May financial calendar, ended fiscal year 2025 (FY25) with 162,000 employees worldwide. Mint learns that about 12,000-15,000 of Oracle's layoffs will be in India, which has a total of 30,000 employees, according to at least four people with knowledge of the matter. Employees across the company's Oracle Health and AI (security) program and Oracle Health Foundations were among those asked to leave, these people said. The company is expected to pay severance equal to four weeks of base salary, plus one week per year of service, according to one of the four people mentioned above. Another executive said a second tranche of layoffs is expected in the coming month. Employees contacted by Mint in India described the layoffs as sudden and unsettling. While some said their roles were rendered redundant despite continuous reskilling, others were retained based on their alignment with the company's AI priorities. Oracle declined to comment on Mint's queries on the issue. Experts said the layoffs signal a broader shift across the software product industry, particularly among SaaS (software as a service) companies. Kashyap Kompella, founder and chief executive of tech consultancy firm RPA2AI Research, said software firms are shifting spending from employee costs to AI-driven capex, a trend likely to make layoffs more common as companies trim pandemic-era headcount and move toward leaner operations. "Oracle had been reducing headcount between 2016 and 2021, and is doing so now as examples like Elon Musk's X have proved that tech companies can survive with a lean workforce," Kompella said. "More SaaS companies will likely follow suit-it is just that Oracle acted faster because of its financial requirements," said Pramod Gubbi, founder of Marcellus Investment Managers. Pointing out that Oracle's data centre requirements prompted the move, Gubbi said that the company's deal with OpenAI requires it to enable data centre capacity before servicing the contract, "and the layoffs were a way to cut costs and redirect them to its data centre commitments". Last September, OpenAI signed a deal with Oracle to purchase $300 billion in computing power over five years to build AI models. This deal is expected to begin next year. "When I got the mail, I thought this was some sort of April Fool's prank," a developer working with the company for five years said on condition of anonymity, adding that they realised it was true only when they could not log in to the company's systems. Gubbi said that Oracle "is the only company amongst the largest SaaS companies that has a net debt". Oracle's net debt in FY25 totalled $82 billion on the back of an 8% climb in revenues to $57.4 billion, per Yahoo finance data.