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Artificial Intelligence continues to prove a threat to software employees. In a latest development, tech giant Oracle is contemplating laying off up to 30,000 employees in the wake of its $300 billion partnership with Sam Altman’s OpenAI.
US banks have pulled back from lending to Oracle-linked data centre projects. The tech giant is facing a serious financial crisis following its heavy investment in OpenAI.
By laying off over 20,000-30,000 jobs, Oracle is likely to save up to an estimated $8 to $10 billion, so that it can fund a network of AI data centres, as part of its partnership with OpenAI and also for its other large customers like AMD, xAI, Meta, Nvidia, and TikTok.
Oracle, chaired by billionaire Larry Ellison, said that the company has plans to raise between $45-$50 billion in debt and equity in 2026 to fund the expansion of its cloud computing business. The announcement about debt raisng led to a slump in the Oracle shares, which fell about 4 per cent in the premarket trading on Monday.
The plans of equity and debt were revealed just weeks after bondholders sued Oracle, stating that the company had kept the debt it would need in wraps, to support the OpenAI deal.
Tech companies are continuing to ramp up capacity even when there is limited scope of potential returns and investors are concerned if the AI-related investments would yield desired returns through sustained demand.
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