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Oracle Cuts Hardware Jobs as Cloud Business Hovers

Oracle To Report Quarterly EarningsOracle To Report Quarterly Earnings

Oracle is laying off hundreds of employees, with most cuts appearing to come from its hardware unit—although there are varying estimates as to how many.

The San Jose Mercury News, which broke the news, put the number at 450. The Layoff, a discussion board where employees anonymously post information about job actions at their companies, puts its unofficial count of layoffs across the database giant at 1,800 out of about 136,000 employees worldwide.

Oracle (ORCL) declined to comment for this story. But last week, the company apparently told the Mercury News that while it was not closing its Santa Clara hardware focused facility, it was “refocusing its Hardware Systems business, and for that reason, has decided to lay off certain of its employees in the Hardware Systems Division.”

That statement builds on comments Oracle co-chief executive Safra Catz made on the company’s second quarter earnings call last month. At that time, she acknowledged that the company was “proactively evaluating” expenses needed to sell hardware that runs on customer sites.

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It’s no surprise that Oracle’s hardware unit, an outgrowth of its $7.4 billion acquisition of Sun Microsystems in 2010, is under pressure. The cloud computing revolution means that many Fortune 500 customers are moving more of their software applications and data to a cloud owned and operated by someone else. That means those business customers are buying fewer servers to run in their own data centers.

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Adding insult to injury, the big cloud providers—like Amazon (AMZN) Web Services and Microsoft (MSFT) Azure, and Google (GOOGL)—don’t buy branded servers the likes of which Oracle builds.