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.
Employees across sales, human resources, engineering and developer roles faced the axe after receiving an email from the company’s leadership at 6 am (in all time zones) on Wednesday, citing “broader organisational change”. The company, which follows a June-May financial calendar, ended 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 amongst 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.
Warning bells for software industry
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.
Gubbi further 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.
Significantly, the company was more profitable than its peers, ending the last fiscal year with operating margins of 31%, up 200 basis points year over year. SAP and Salesforce ended last fiscal with margins of 26.7% and 20.1%, respectively.
Sanketh Chengappa, director for professional staffing at global recruitment services firm, The Adecco Group, said geopolitical factors and companies’ focus on AI are leading to changes in early and mid-career conventional technical engineering roles, which could lead to layoffs.
“Oracle’s executives have indicated that AI coding tools let smaller engineering teams move faster. This doesn’t necessarily mean AI will replace thousands of workers overnight. Rather, AI made it easier for Oracle leadership to justify tighter spans of control and fewer layers in some teams,” said Thomas Reuner, principal analyst at Pierre Audoin Consultants, adding that Oracle’s AI infrastructure development might result in a capital reallocation and a reset of its operating model.
Employees surprised
Meanwhile, Oracle’s announcement surprised its employees in India.
“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.
Others said even reskilling didn’t help. “I kept reskilling but I guess that wasn't enough since my role itself was deemed unnecessary,” a senior developer with 16 years of experience in the company’s Bengaluru office said.
Some had sensed the coming storm. “A week ago, we got the feeler as Oracle told us they are holding our offer letters for the time being, citing company restructuring,” said a fresher who was due to join the company next month.
The company had approved a restructuring plan in the first nine months of fiscal 2026 to "further improve efficiencies in our operations due to our acquisitions and certain other operational activities (2026 Restructuring Plan)”.
“The total estimated restructuring costs associated with the 2026 Restructuring Plan are up to $2.1 billion,” read the company’s filing with the US Securities and Exchange Commission for the quarter ended February 2026.
Others managed to keep their jobs. An employee in Oracle’s India engineering team, who requested anonymity, was retained after presenting a two-year AI adoption roadmap even as this executive’s immediate reporting managers, at vice-president levels and above, were released. This executive said the roadmap was approved by senior management on condition that there would be a 30% reduction in headcount each year over the next two years.
Investors wary
Investors have grown wary of the threats posed to software companies. Oracle’s shares have fallen 24.5% on the New York Stock Exchange from the start of the year. Earlier, in November 2022, its shares had fallen 6% in the week following the launch of ChatGPT.
A similar episode occurred in January this year, after the company’s shares fell up to 11% after Anthropic’s Claude launched new AI plug-ins to aid in marketing, legal, and sales-related tasks.
Indian companies’ stocks, too, have been hit. Since the start of the year, shares of 11 homegrown software product companies have fallen 10-50%. Amagi Media Labs was the only exception, with its shares rising 3.69% during this period.
On the other hand, shares of 10 of the world's largest software product companies, including Microsoft, SAP, and Salesforce, have fallen by 6-40% since the start of the year.
