Oracle has initiated a significant restructuring, resulting in the layoff of approximately 10% of its workforce in India. This decision, impacting nearly one in ten employees, follows Oracle CEO Larry Wilson's meeting with US President Donald Trump and the company's deal with OpenAI, fueling speculation about the motives behind the move.

India has been a crucial hub for Oracle, employing around 28,824 people across cities like Bengaluru, Hyderabad, Chennai, Pune, Noida, Mumbai and Kolkata. The layoffs have affected teams in software development, cloud services, and customer support. Many employees were caught off guard, expressing concerns about severance packages and future job prospects. Oracle has described the decision as part of a global restructuring, but the scale of job losses has raised concerns within the Indian tech industry.

The timing of the layoffs, shortly after Oracle's CEO met with President Trump and the OpenAI deal, has led to speculation about the underlying reasons. Discussions between Wilson and Trump reportedly focused on domestic hiring, national data security, and technology partnerships. The subsequent deal with OpenAI involves processing large-scale AI data on Oracle's infrastructure. Some industry observers believe the restructuring aligns with a broader strategy to concentrate resources in the US market, reflecting Trump's emphasis on reducing offshoring and reliance on H-1B visas.

While India has been significantly affected, the layoffs are not limited to the region. Job cuts have also been reported in the United States, Canada, and Mexico. In Seattle, over 150 employees have been laid off. These reductions are part of a broader trend among major technology companies restructuring their operations to invest in AI and data center expansion. Companies like Amazon, Microsoft, and Google have also implemented layoffs in their cloud and AI divisions.

Oracle's restructuring involves reallocating resources towards capital-intensive infrastructure to support generative AI. Scaling data centers and cloud capacity is considered critical for sustaining future revenue growth. Despite the layoffs, Oracle's cloud business is performing well, with cloud revenue increasing by 27% to $6.7 billion last quarter and OCI revenue surging by 52% to $3 billion. Oracle is also hiring for specific cloud roles in locations like Nashville, after relocating its headquarters there last year.

Oracle has stated that workforce changes are part of strategic adjustments, reorganizations, or performance management. The company acknowledged that such restructurings may lead to increased costs and temporarily reduced productivity. Despite the company's assertion that the layoffs are part of a restructuring exercise, media reports suggest that the US policy to reduce offshoring and H-1B visa issuance are the main reasons for the layoffs.