Oracle: Billion-dollar costs for AI infrastructure now likely to cause layoffs

Given the immense costs associated with Oracle's extensive entry into the cloud business and the construction of AI data centers, the US corporation now intends to cut thousands of jobs – possibly as early as this month. This is reported by the financial news agency Bloomberg, citing anonymous individuals familiar with the plans. The layoffs are said to affect various business areas, and for some affected positions, it was already expected that they would no longer be needed thanks to AI. The company has not commented on the report, and Oracle currently has around 162,000 employees.

Investments expected to pay off from 2030

Oracle's entry into the cloud business initially caused its own stock price to rise significantly, but as the associated costs became more apparent, profits were lost again. Since the beginning of September alone, the price of Oracle shares has halved. However, after the report on the planned layoffs, it rose slightly. According to Bloomberg, Wall Street forecasts that Oracle's cash flow will remain negative in the coming years. The massive investments are not expected to pay off until 2030. This year alone, the corporation intends to raise up to 50 billion US dollars through bond and stock sales.

Germany is also set to benefit from Oracle's multi-billion-dollar investments in cloud infrastructure. In the coming years, two billion US dollars are to be spent in this country to meet the growing demand for artificial intelligence applications and cloud infrastructure, it was stated last summer. The majority of this is to flow into the Rhine-Main region. Nevertheless, this is only a fraction of the sum that is to be spent in the USA, and doubts are repeatedly expressed whether the money can actually be recouped.

(mho)