Oracle Joins Microsoft, TCS in Job Cuts as AI Investments Rise

Tech Giants Cut Jobs as AI Costs Surge

Oracle has joined Microsoft (MSFT) and Tata Consultancy Services (TCS) in trimming its workforce, highlighting how rising artificial intelligence (AI) expenses are reshaping the global tech sector.

According to Bloomberg, Oracle laid off employees in its cloud division to control spiraling AI infrastructure costs, with some cuts tied to performance issues. This comes despite Oracle’s stock trading near an all-time high and the company’s landmark 4.5 GW data center deal with OpenAI in the US. However, tens of billions of dollars in server-farm investments have pushed Oracle’s free cash flow negative for the fiscal year ending May.

Oracle Workforce Adjustments (📊)

In a June filing, Oracle confirmed it periodically restructures its workforce due to strategy shifts, reorganizations, or performance reviews.

“These types of restructurings have resulted, and may in the future result, in increased restructuring costs and temporarily reduced productivity,” the company noted.

Microsoft Layoffs (💻)

♦ Job cuts: ~9,000 roles (less than 4% of workforce)

♦ Focus: Streamlining operations, cutting middle management, and intensifying AI development

♦ CEO Satya Nadella called the decision “the enigma of success,” emphasizing Microsoft’s mission to build AI tools and empower users to create AI-powered solutions.

TCS Layoffs (🇮🇳)

♦ Job cuts: ~12,000 roles, TCS’s largest ever

♦ Reason: Workforce restructuring to become a “Future-Ready organization”

♦ Expert view: While TCS cited skill mismatches, analysts say AI adoption is automating basic coding, testing, and support roles, potentially eliminating 400,000–500,000 jobs in India’s $283B IT sector over 2–3 years.

Who’s at risk?

♦ Mid-level people managers with limited technical skills

♦ Software testers and infrastructure support staff

♦ Employees with 4–12 years of experience, making up 70% of projected layoffs

Market impact:

Gaurav Vasu (UnearthInsight) warned these layoffs could dampen consumer demand in tourism, luxury shopping, and real estate as job insecurity spreads.

Ray Wang (Constellation Research) added:

“We are in the midst of a massive transition that will transform white-collar work as we know it.”

Key Takeaways (✔)

♦ Oracle, Microsoft, and TCS are cutting jobs to offset heavy AI infrastructure spending.

♦ AI is automating routine IT tasks, requiring upskilling in advanced technologies.

♦ Global tech workforce disruption could reshape the sector over the next 2–3 years.