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Oracle reportedly making job cuts at health IT arm Cerner

OCI is much more efficient than the acquired Cerner DCs, Ellison told investors

Oracle is set to make a number of job cuts at Cerner, the electronic health records company it acquired last year, as its shift workloads to its cloud infrastructure.

Big Red paid $28 billion for Cerner in June, promising an expansion of its health sector of activity.

However, a report from Bloomberg suggests that Oracle has begun a round of layoffs in an effort to reduce costs. Staffers were told last week that jobs had been eliminated, with marketing, creative services, and technical positions affected.

Jason Withington, a Cerner worker for nearly 16 years most recently in datacenter operations, told gthe publication he lost his job last week. A number of workers in the Kansas City offices had also been let go, he said but a total figure on the headcount reduction was not confirmed.

The company is understood to be making a numerous layoffs that fall below the numbers that wouyld trigger a WARN Act filing in the US.

The Register has asked Oracle to comment.

On an earnings call with analysts earlier this month, CTO and founder Larry Ellison said: “As we move our Cerner patients from the Cerner datacenters into the Oracle OCI Cloud, we expect to get much better security, much better reliability, much better performance and dramatically lower our costs of providing that cloud service. OCI is just much more efficient than the Cerner datacenters that we acquired.”

The statement echoes earlier comments from Chief Executive Officer Safra Catz, who told investors last October that it was looking to “clean Cerner up” and improve profitability at the acquired business unit. “The situation in Cerner — that’s just not how we run a place,” she said.

For the third quarter of fiscal 2023, Cerner contributed $1.5 billion to Oracle’s total revenues of $12.4 billion. In the earnings announcement, Ellison claimed that since June 2022, Cerner had increased its healthcare contract base by around $5 billion.

On the Q3 earnings call, Catz told investors: “As we drive Cerner profitability to Oracle standards and continue to benefit from economies of scale in the cloud, we will not only continue to grow operating income, but we will also grow the operating margin percentages. For example, while we have only owned Cerner for three quarters, we have already improved its operating margin by over 5 percentage points compared to before the acquisition.” ®

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