When database giant Oracle conducted layoffs — first in August and again earlier this month — the cuts impacted thousands of employees globally. Its marketing and customer experience, or CX, divisions were among the hardest-hit units, but the company's cloud division, Oracle Cloud Infrastructure , or OCI, appeared to remain untouched.
But as Oracle tightens spending in a bid to cut as much as $1 billion in costs, not even OCI is immune, Insider has learned.
Led by Clay Magouyrk, OCI is Oracle's big bet into cloud computing, where it faces stiff competition against heavyweights like Amazon Web Services, Google Cloud, and Microsoft Azure. OCI, according to several employees, considers itself almost separate from the rest of Oracle, a 45-year-old database giant still best known for its legacy database products.
Employees in and outside the unit tell Insider the cloud division is where the "innovation" still happens at the tech giant, which is why within Oracle, it's seen as the most desirable unit to transfer into. Despite being known for its frugality, Oracle was always willing to spend top dollar on OCI, using big salaries and lucrative compensation packages to recruit away from firms like AWS.
OCI recruiters and hiring managers have been directed to stop hiring from top markets like the San Francisco Bay Area, Seattle, and New York and instead focus on candidates who would command lower salaries. What's more, some open roles in the unit are being shifted internationally, such as to Eastern Europe, where people involved with OCI hiring say they can get multiple new hires for the price of one.
"Salaries are too high, and so we're looking in other areas where salaries and cost of living are lower," an employee involved with OCI recruiting told Insider. They asked to remain anonymous because they weren't authorized to speak to the press.
The location-based constraints within OCI come amid a wave of new hiring restrictions at Oracle that have employees concerned another round of mass layoffs is looming, Insider previously reported. The restrictions inside OCI in particular follow a period of rapid hiring in 2021, when cloud firms raced to give candidates lucrative packages to win talent, the employee said.
Oracle is still a small player in the race for cloud dominance, accounting for just 2% of the market share. Its top competitor, AWS, has around 33% share, according to Synergy Research. But Oracle has landed huge clients within the past two years, such as telecommunications firm Zoom in 2020 and ByteDance's TikTok this past June.
Oracle's growing list of high-profile customers has bolstered the firm's standing against its competitors. Business from OCI, especially with the addition of TikTok, has helped grow Oracle's revenue by 5% in the most recent fiscal year.
But this disruption to OCI's hiring process could spell trouble for the database giant's ability to support its most important customers, especially with vacant roles and heavy attrition across several Oracle's business units. Additionally, the firm's unwillingness to spend on labor has cost Oracle before, especially as its marketing cloud unit continues to lag behind competitor Salesforce.
According to a recent report by the financial firm William Blair, while Oracle reports solid revenue growth across its cloud business, "heavy investments" into OCI and its newly acquired healthcare firm, Cerner, may drag on future margins over the next year.
Steven Dickens, an analyst at Futurum Research, believes Oracle's willingness to cut into its most prized units indicates more trouble for the wider macroeconomic climate in hiring, rather than any Oracle-specific issue. Especially given that its biggest competitor, AWS, is facing its own hiring troubles, Oracle might actually be able to use this opportunity to further establish itself in the cloud market.
"While larger economic headwinds are reflected in its most recent earnings, OCI has still established itself as a credible player worthy of consideration, especially given its meteoric rise from where they were only a few years ago," Dickens told Insider.
Oracle did not respond to a request for comment.
Do you work at Oracle and have insight to share? Contact reporter Ellen Thomas at ethomas@insider.com. Contact reporter Jessica Xing via the encrypted messaging apps Signal or Telegram at +1 (551)-280-9140 or at jxing@insider.com.
