Oracle's credit rating has been downgraded to a notch above "junk" status [1].
That means they can't borrow cheaply anymore. The only way to raise cash now is to cut payroll, and that's what they are doing. And what are they doing with the cash? Buying Nvidia hardware to rent out to OpenAI [2].
All Oracle is doing is unpacking Nvidia servers and plugging them in. This is a commodity business, Oracle has no IP in this. To fund it they are making deep cuts to their software development business which does have proprietary IP.
That may have made sense when it was originally announced because AI hype was at its peak at the time. Indeed, Oracle's stock shot up when Stargate was announced, and Larry Ellison briefly became the world's richest person. However, since then the AI hype has evaporated, and hyperscalers are no longer being rewarded with a higher stock price. Oracle stock has dropped more than 50%, and companies NOT investing 100s of billions in AI hardware are now being rewarded, such as Apple.
Larry Ellison's son had to scale down his media and TV empire ambitions when Oracle stock crashed. That's one thing to celebrate, because we don't want CNN to be controlled by the Ellisons.
It’s been more than a decade when CNN was a respected institution. I agree it’s too late for the news media in general. Their incentives are unfortunately all lined up just like social media: pure ragebait is the fully optimized product. The only thing changing from now on is fine tweaks to get it slightly more… ragey.
From what I can see, online media has finally taken over. The horrendous coverage from the 2024 election may have finally been the last straw for many people.
People seem to be focusing more on individual reporters, subscribing directly to good journalists who have gone out on their own. We are also seeing a thing that pleases me ver much: Reporters focusing on the subjects they are experts in and not doing a jack of all trades master of none. Its made me accept that I wont get top tier news in every subject so I have to pick what really matters to me(Tech, Food, entertainment, geopolitics of specific regions of the world etc.).
On the low end though its more bleak. TikTok slop, Youtuber "commentators" etc.
They are still making billions from highly sticky enterprise customers, which is more than enough to survive. Otherwise, Microsoft would have gone out of business years ago.
Putting a big X on the Ellison photo in the rogue's gallery of tech elites will be satisfying. In an industry chock full of despicable men, Ellison is a real standout.
What else does Oracle have? Mostly just a bunch of IP that a sufficiently strong AI will be able to recreate for a fraction of each customers bill. Oracle is very aware.
Where is the value coming from when all knowledge work (and later manual work) is 10-100-10000x cheaper done by AIs? You probably don’t want to build models, too easy to move to another provider when one is better, open models eat your lunch etc. But there are still means of production to be owned but it’s just GPUs
What? Nvidia stock, for instance has been moving largely sideways for the past 4 months. Maybe it's not as jubilant as before, but it hasn't exactly "evaporated".
That's relative to the hype we had before. Previously any involvement in AI was rewarded heavily, but now it is being punished. Wallstreet previously punished Apple for not enough AI now they are being rewarded for not throwing 100s of billions into AI hardware.
I think the parent is overselling it when they say "AI hype has evaporated". Nvidia is still trading high because they're still selling shovels in the gold rush, and the frontier labs are still trading high as well. What is collapsing are the infra providers who are just selling commodities: even if the bubble doesn't crash they will get chewed up, because there is nothing preventing them from being forced to sell at COGS: they have no moat and eventually their margins will be driven to zero.
PE is forward looking. Apple has the business model where people will continue to buy their newer phones and devices and use their paid services at the same or higher prices for the foreseeable future.
Do you think GPUs will continue to be bought at the same rate as during the ai data center buildout gold rush era, at the same ultra high up prices?
My employer has somehow managed to avoid the constant layoffs since 2022 trend, shockingly, and I think this is a big reason we have relatively low churn despite not having many promotions, refreshers, etc (on top of some relatively uncommon benefits for a large tech company). I was recently interviewing a few engineers from FAANG+ companies who are desperate to get out of the squid games and quarterly layoff fears. I wish more companies would realize what a selling point this is, and I wish my CEO would publicly brag about how is he is competent enough to not need to churn through 10+% of his workforce a year AND have great stock price growth over the last 6 years.
> desperate to get out of the squid games and quarterly layoff fears
"If we reduce the number of employees for better short-term financial results, employee morale will decrease. I sincerely doubt employees who fear that they may be laid off will be able to develop software titles that could impress people around the world."
While I feel sorry for the people involved, Oracle as a company richly deserves this, for reasons far too familiar to everyone here. This is a come-uppance that has been waiting to happen for decades.
I'm not sure this is really the come-uppance you're looking for. Oracle still has a larger market cap than at any point in history except the last ~2 years.
> We are grateful for your dedication, hard work, and the impact you have made during your time with us.
Why do companies bother with this horse excrement? Does a sentence like this make anyone feel better?
Most times, I wish they'd just send the honest truth. "Hey, we screwed up. We over-hired and ran out of funds so we had to let you go to make payroll" or "Our M&A strategists overpaid for an over-leveraged company and now we have to figure out how to pay down the debt. Your position was cut as a result."
Obviously corporations owe nothing to nobody (apparently) but I'd love it if the patronizing language stopped.
As someone also freshly laid off (not Oracle though), let me solemnly acknowledge my new cohorts. Best of luck to everyone, it's tough out there. Stay sharp and focused, hoping for the best.
Oracle is in a spiral it seems. Is Stargate still plugging along?
Too bad they weren't unionized--I assume that would have helped.
The workers who built the company and created its worth (obviously not evenly distributed) now get a "thank you very much goodbye" e-mail. I think they deserve ownership and to take part in these decisions.
And probably no small part of the downturn of Dilbert (besides Adams going a bit nuts) is that Adams is no longer in a workplace he can satirize so it remains stuck largely in 90s cubeland.
If you run sub-par agents on large codebase that's kinda what they do. Every task ends with duplication, added flags bifurcating the code and everything else described in that comment haha
>The company has not disclosed how many workers were affected by the latest cuts
One of the first things that "progressive" politicians should do if they take power is require large companies to disclose the exact number of firings before people are notified.
That's already the law in the US, the WARN act. It requires 60 days notice before any mass layoffs. The way companies "get around" this is by not actually laying you off, but giving you 60 days notice that you will be laid off and then removing all your access during those 60 days, at the same time they report the 60 days notice of layoffs. It's essentially 60 days severance (plus reporting to the government), which IMO is better than everyone walking wondering who will actually be laid off in 60 days. You can even see that in the email they sent, "today is your last working day" but there will be an email with "details on your [...] termination date". It's unclear to me if this layoff doesn't qualify as a mass layoff (so no warning period needed) or if they just haven't filed it yet, but I'm guessing they'll file it soon enough.
"Even if an employer does not have a collective agreement, they must negotiate major changes to working and employment conditions of employees who are members of a trade union as if the employer had a collective agreement."
Negotiations include getting the lists of positions that will be terminated, number of employees affected, new positions that may be opened during a reorganization, etc.
I doubt it was cold as in no prior information cold but more like "cold sounding". If the layoffs affected > 50 employees then it would have triggered the CALWarn act which is the California additions to the federal warn act. So the oracle employees got 60 days notice and have known the email was coming today for 2 months. If they didn't then Oracle owes them 60 days of pay and benefits.
The usual way companies handle this is to set the actual layoff date as 60 days from when the email goes out. If you hear about a mass layoff including two months of salary for everyone affected, that’s what’s going on. Typically system access is revoked but the paychecks keep coming as usual and vacation keeps accruing, because you’ve got that extra two months of “employment.” The company also gets the benefit of being able to call you back in if it turns out there was something vital you were doing that never got documented.
This, the company stays compliant with all the regulations but they don’t have to worry about disaffected employees during those 60 days.
Oracle's credit rating has been downgraded to a notch above "junk" status [1].
That means they can't borrow cheaply anymore. The only way to raise cash now is to cut payroll, and that's what they are doing. And what are they doing with the cash? Buying Nvidia hardware to rent out to OpenAI [2].
All Oracle is doing is unpacking Nvidia servers and plugging them in. This is a commodity business, Oracle has no IP in this. To fund it they are making deep cuts to their software development business which does have proprietary IP.
That may have made sense when it was originally announced because AI hype was at its peak at the time. Indeed, Oracle's stock shot up when Stargate was announced, and Larry Ellison briefly became the world's richest person. However, since then the AI hype has evaporated, and hyperscalers are no longer being rewarded with a higher stock price. Oracle stock has dropped more than 50%, and companies NOT investing 100s of billions in AI hardware are now being rewarded, such as Apple.
[1] https://www.nytimes.com/2026/07/31/magazine/takeaways-larry-...
[2] https://en.wikipedia.org/wiki/Stargate_LLC
Oracle going out of business would at least be one thing to celebrate in 2026.
Larry Ellison's son had to scale down his media and TV empire ambitions when Oracle stock crashed. That's one thing to celebrate, because we don't want CNN to be controlled by the Ellisons.
That's true, but then again, CNN is a mere husk of its former self. Something needs to change, but maybe it's too late for profit-driven news media.
It’s been more than a decade when CNN was a respected institution. I agree it’s too late for the news media in general. Their incentives are unfortunately all lined up just like social media: pure ragebait is the fully optimized product. The only thing changing from now on is fine tweaks to get it slightly more… ragey.
Bloomberg and Economist seem to be doing OK, so it is possible.
But isn't not-for-profit news media also struggling?
From what I can see, online media has finally taken over. The horrendous coverage from the 2024 election may have finally been the last straw for many people.
People seem to be focusing more on individual reporters, subscribing directly to good journalists who have gone out on their own. We are also seeing a thing that pleases me ver much: Reporters focusing on the subjects they are experts in and not doing a jack of all trades master of none. Its made me accept that I wont get top tier news in every subject so I have to pick what really matters to me(Tech, Food, entertainment, geopolitics of specific regions of the world etc.).
On the low end though its more bleak. TikTok slop, Youtuber "commentators" etc.
CNN is mostly a lost cause, though I do agree with your statement.
The real problem with that one, though, is it would utterly destroy the American movie industry, which is a crucial part of our economy and culture.
[delayed]
Not for the employees, obvs. I'm not going to celebrate misery, especially if that misery makes an already-tough job market that much worse.
They are still making billions from highly sticky enterprise customers, which is more than enough to survive. Otherwise, Microsoft would have gone out of business years ago.
> They are still making billions from highly sticky enterprise customers
That's true. This lets Oracle coast for a while. But if they coast for too long SAP will overtake them.
I hope whoever buys their parents, they relicense ZFS
Putting a big X on the Ellison photo in the rogue's gallery of tech elites will be satisfying. In an industry chock full of despicable men, Ellison is a real standout.
If Sam and Dario manage to kill Oracle, this whole era of software will have been worth it.
If it happens in 2026, they will likely be bailed out.
"Dear Santa..."
They still maintain Java and Graal VM. That is more that the BS coming out of Misanthropic and ClosedAI.
What else does Oracle have? Mostly just a bunch of IP that a sufficiently strong AI will be able to recreate for a fraction of each customers bill. Oracle is very aware.
Where is the value coming from when all knowledge work (and later manual work) is 10-100-10000x cheaper done by AIs? You probably don’t want to build models, too easy to move to another provider when one is better, open models eat your lunch etc. But there are still means of production to be owned but it’s just GPUs
> All Oracle is doing is unpacking Nvidia servers and plugging them in. This is a commodity business
But it's not if you can jump to the front of the GPU allocation line like Musk has done.
>However, since then the AI hype has evaporated
What? Nvidia stock, for instance has been moving largely sideways for the past 4 months. Maybe it's not as jubilant as before, but it hasn't exactly "evaporated".
That's relative to the hype we had before. Previously any involvement in AI was rewarded heavily, but now it is being punished. Wallstreet previously punished Apple for not enough AI now they are being rewarded for not throwing 100s of billions into AI hardware.
Apple still did have to learn what it costs to invest in AI hype marketing, with all the lawsuits about the iPhone 16.
I think the parent is overselling it when they say "AI hype has evaporated". Nvidia is still trading high because they're still selling shovels in the gold rush, and the frontier labs are still trading high as well. What is collapsing are the infra providers who are just selling commodities: even if the bubble doesn't crash they will get chewed up, because there is nothing preventing them from being forced to sell at COGS: they have no moat and eventually their margins will be driven to zero.
NVDA P/E is 26. That's hardly overhyped. For comparison AAPL P/E is 38.
PE is forward looking. Apple has the business model where people will continue to buy their newer phones and devices and use their paid services at the same or higher prices for the foreseeable future.
Do you think GPUs will continue to be bought at the same rate as during the ai data center buildout gold rush era, at the same ultra high up prices?
My employer has somehow managed to avoid the constant layoffs since 2022 trend, shockingly, and I think this is a big reason we have relatively low churn despite not having many promotions, refreshers, etc (on top of some relatively uncommon benefits for a large tech company). I was recently interviewing a few engineers from FAANG+ companies who are desperate to get out of the squid games and quarterly layoff fears. I wish more companies would realize what a selling point this is, and I wish my CEO would publicly brag about how is he is competent enough to not need to churn through 10+% of his workforce a year AND have great stock price growth over the last 6 years.
> desperate to get out of the squid games and quarterly layoff fears
"If we reduce the number of employees for better short-term financial results, employee morale will decrease. I sincerely doubt employees who fear that they may be laid off will be able to develop software titles that could impress people around the world."
— Satoru Iwata (former Nintendo CEO)
While I feel sorry for the people involved, Oracle as a company richly deserves this, for reasons far too familiar to everyone here. This is a come-uppance that has been waiting to happen for decades.
I'm not sure this is really the come-uppance you're looking for. Oracle still has a larger market cap than at any point in history except the last ~2 years.
> We are grateful for your dedication, hard work, and the impact you have made during your time with us.
Why do companies bother with this horse excrement? Does a sentence like this make anyone feel better?
Most times, I wish they'd just send the honest truth. "Hey, we screwed up. We over-hired and ran out of funds so we had to let you go to make payroll" or "Our M&A strategists overpaid for an over-leveraged company and now we have to figure out how to pay down the debt. Your position was cut as a result."
Obviously corporations owe nothing to nobody (apparently) but I'd love it if the patronizing language stopped.
As someone also freshly laid off (not Oracle though), let me solemnly acknowledge my new cohorts. Best of luck to everyone, it's tough out there. Stay sharp and focused, hoping for the best.
Oracle is in a spiral it seems. Is Stargate still plugging along?
Too bad they weren't unionized--I assume that would have helped.
The workers who built the company and created its worth (obviously not evenly distributed) now get a "thank you very much goodbye" e-mail. I think they deserve ownership and to take part in these decisions.
[delayed]
I love the smell of [layoff emails] in the morning.
Makes me wonder why they're shedding so much and if Zitron was a little right after all.
Yeah what’s the end game here? Can they keep running with such deep cuts to staff and morale…
[delayed]
> The latest cuts come after Oracle's workforce fell by roughly 21,000 employees, or 13%, during fiscal 2026
13% doesn't seem too different from other tech companies
The 13% quoted there was from previous layoffs that mostly took place in Q2 of 2026.
This is another 20,000 - 30,000 (the exact number isn't public yet) on top of that.
The difference is that they didn't overhire during Covid.
Well they do have their own interference capacity. So AIs to solve every single issue.
Morale has been low at oracle for years. Now it’s just a “we pay you and push you as hard as we can for it until you quit” shop.
That's... most jobs.
Most work for least pay is just business, I thought?
Beatings shall continue until morale improves.
>" Can they keep running with such deep cuts to staff and morale…"
...First time?
Oracle is literally the company Dilbert was making fun of
He worked at Pacific Bell between 1986 and June 30, 1995, and the personalities he encountered there inspired many of his Dilbert characters.
https://en.wikipedia.org/wiki/Scott_Adams
And probably no small part of the downturn of Dilbert (besides Adams going a bit nuts) is that Adams is no longer in a workplace he can satirize so it remains stuck largely in 90s cubeland.
I wonder how this holds up in the age of AI
https://news.ycombinator.com/item?id=18442941
If you run sub-par agents on large codebase that's kinda what they do. Every task ends with duplication, added flags bifurcating the code and everything else described in that comment haha
Off-topic, but I hate the use of the word "photo" in the caption under the AI-gen'd image:
> (PHOTO: GEMINI AI)
Yells at cloud
Banks threatened Larry with a margin call for his $80B loans with stock collateral?
I'm confused... Did you expect anything different from Oracle?
Thats how they usually happen ? They are always "cold"
Unless you're C level, in which case you get promoted to "Vice President in Charge of Looking for a New Job" for a quarter.
>The company has not disclosed how many workers were affected by the latest cuts
One of the first things that "progressive" politicians should do if they take power is require large companies to disclose the exact number of firings before people are notified.
That's already the law in the US, the WARN act. It requires 60 days notice before any mass layoffs. The way companies "get around" this is by not actually laying you off, but giving you 60 days notice that you will be laid off and then removing all your access during those 60 days, at the same time they report the 60 days notice of layoffs. It's essentially 60 days severance (plus reporting to the government), which IMO is better than everyone walking wondering who will actually be laid off in 60 days. You can even see that in the email they sent, "today is your last working day" but there will be an email with "details on your [...] termination date". It's unclear to me if this layoff doesn't qualify as a mass layoff (so no warning period needed) or if they just haven't filed it yet, but I'm guessing they'll file it soon enough.
This is how it works in Sweden: https://www.unionen.se/in-english/notice-to-termination
"Even if an employer does not have a collective agreement, they must negotiate major changes to working and employment conditions of employees who are members of a trade union as if the employer had a collective agreement."
Negotiations include getting the lists of positions that will be terminated, number of employees affected, new positions that may be opened during a reorganization, etc.
Stop cheering. Oracle still offers a free arm 4x6GB kubernetes cluster and 2 free amd cpu‘s.
It‘s the best free platform for learners and small scale operations.
the only reason there is compute availability is because devs hate Oracle so much that they don't know about it
an LLM told me about that option when I was seeking out free tiers
Oh boy here we go again
I doubt it was cold as in no prior information cold but more like "cold sounding". If the layoffs affected > 50 employees then it would have triggered the CALWarn act which is the California additions to the federal warn act. So the oracle employees got 60 days notice and have known the email was coming today for 2 months. If they didn't then Oracle owes them 60 days of pay and benefits.
The usual way companies handle this is to set the actual layoff date as 60 days from when the email goes out. If you hear about a mass layoff including two months of salary for everyone affected, that’s what’s going on. Typically system access is revoked but the paychecks keep coming as usual and vacation keeps accruing, because you’ve got that extra two months of “employment.” The company also gets the benefit of being able to call you back in if it turns out there was something vital you were doing that never got documented.
This, the company stays compliant with all the regulations but they don’t have to worry about disaffected employees during those 60 days.