Oracle Cuts Cerner Jobs After CEO Promised to ‘Clean Up’ Health Unit

(Bloomberg) — Oracle Corp. has cut jobs at its Cerner digital health-records unit, particularly in marketing, as the software giant works to integrate last year’s $28.3 billion acquisition.

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Workers were informed last week that their positions had been eliminated, according to multiple people with direct knowledge of the matter. While the full scale of cuts couldn’t be determined, Cerner’s marketing and creative services divisions were hard hit, and some technical positions also were affected, said former employees who lost their jobs.

Jason Withington worked at Cerner for nearly 16 years, most recently in data center operations, before his job was wiped out last week. He said multiple workers in his division with over a decade of tenure had been let go. Withington is also a recently elected commissioner for Clay County in Missouri, the county in the Kansas City metropolitan area where Cerner’s old headquarters was located.

Oracle didn’t respond to requests for comment. Cerner, which became part of the company last June, has fueled cloud growth and contributed more than $1.5 billion in revenue in the most recent quarter. Chairman Larry Ellison has said Oracle anticipates even stronger future growth for the electronic records business.

Still, the software giant is focused on cutting costs at Cerner. At an investor event in October, Chief Executive Officer Safra Catz said there are many ways that profitability could be improved at the acquired unit. “The situation in Cerner — that’s just not how we run a place,” Catz said, later adding they would “clean Cerner up.”

Oracle announced last year that it would conduct a restructuring program “due to our acquisitions and certain other operational activities,” according to a recent regulatory filing. The company spent $585 million on the program through Feb. 28, primarily related to employee severance costs, and estimated it would spend some of the remaining $342 million allocated for restructuring through the end of the fiscal year in May.

Oracle employed about 143,000 people in May 2022, before the Cerner deal closed, the company said. Cerner had about 25,000 employees when the acquisition was announced in December 2021, according to data compiled by Bloomberg.

Earlier this month, Catz said Cerner’s operating margin has increased over 5 percentage points since the acquisition. Last year, Oracle said it would close some offices in the Kansas City area and consolidate its workforce into a single location. The recent Cerner job reductions were reported earlier by the Kansas City Business Journal.

Oracle is famous for its cost cuts and high profits. In an earnings call earlier this month, Salesforce Inc. CEO Marc Benioff said he learned the “Oracle Playbook” from Ellison as activist investors pushed Benioff to boost earnings. A few months prior, Salesforce announced it would cut 8,000 workers.