Corporation That Received Almost 1/4 Billion In TN Taxpayer Dollars Now Appears To Be Laying Off Employees

Photo: One of the buildings at Oracle offices in Redwood Shores, California. Photo Credit: Not Quite a Photographr / CC

The Tennessee Conservative [By Jason Vaughn] –

The Big Tech Corporation Oracle appears to have begun laying off employees at its Nashville office.

In September 2021, The Tennessee Comptroller State Funding Board approved $65 million in FastTrack grants for Oracle’s new Nashville campus.

FastTrack grants are economic incentives paid to companies to help offset the costs of expanding or moving into the state with the goal of increasing the number of full-time jobs and the average wages of jobs available in an area.

The apparent layoffs come as plans for Nashville’s East Bank development, featuring a planned Oracle riverfront tech campus, are continuing to move forward.

Americans for Prosperity -TN (AFP-TN) State Director Tori Venable released the following statement: 

“If true, layoffs by Oracle are a massive breach of taxpayer trust. It is exactly why claw back provisions are important with any deal the government makes. If a company is not living up to their community development promises, taxpayers should not be stuck with the bill to fund a private business’ profits.” 

Oracle has received $65 million in Economic Community Development (ECD) grants from the state, to create 5,000 new jobs, and $175 million in local property tax breaks. 

When Nashville mayor John Cooper made the announcement on the Oracle project back in April of 2021, he made claims that the new campus would bring 8,500 jobs to the East Bank.

In the final agreement, Oracle promised to create 5,989 net new jobs within five years.

It is currently unknown whether any layoffs will put the Big Tech company in violation of the agreements.

A current Oracle employee told NewsChannel5 that he knows of at least 10 Nashville-based employees who have been given layoff notices, but he suspects the number to be much higher.

The employee provided NewsChannel 5 with an email he received from an Oracle employee detailing the layoff, as well as a corporate Reduction In Force document the company emailed him.

The employee stated that the vast majority of people on his team moved to Nashville from out of town to accept a job with Oracle with expectations that they would be moved to the new East Bank campus once opened.

According to the employee, everyone in his team of around a dozen individuals were given layoff notices, all of which had only started working for Oracle in February of this year.  He states that many of them are locked into ironclad leases on their pricey Nashville apartments that they can’t get out of for at least a year.

Apparently, some of the layoffs are happening within Oracle’s cloud organization that sells cloud infrastructure and tech to other companies.

In response to the news, AFP-TN is calling on the legislature to utilize claw backs on ECD funding if employment numbers are not hitting benchmarks and on Metro Council to examine forgone revenue from future property tax breaks. 

Recent academic research has revealed that the largest impact of economic incentives, such as those given to Oracle, is political and financial benefit to the politicians who approved them.  

Gary Wagner, a professor of economics at the University of Louisiana-Lafayette, worked with The Citadel’s Russell Sobel and College of Charleston’s Peter Calcagno on the report, which tracked 16 years of data on rising economic incentives for private businesses.

Wagner said that economic incentives are good politics but not good economics. He said much of the prior research done on incentives has been aimed at their effectiveness in creating jobs, higher income or more tax dollars for a state. That research has consistently shown that there is not large benefit to incentives, he said, so instead he looked to find out other reasons that they might be widely used.

The research focused on political donations from groups, such as trade and construction organizations and lawyers/lobbyist, and found that their political donations increased exponentially after incentives were given.

“After a state awards their first really, really large incentive, total campaign contributions from these types of organizations go up significantly compared to states that haven’t awarded a very large incentive,” Wagner said.

Wagner said that the economic impact reports used to support incentive decisions are consistently inaccurate and inflated.

“In addition to receiving higher campaign contributions, we also find that the margin of victory for incumbent politicians actually gets wider when they give these big incentives,” Wagner said. “What I would suggest to people is, in the absence of evidence that these programs work, they should assume they do not work. Flip the default.”

In Tennessee, Gov. Bill Lee’s largest contributions by sector include finance, insurance and real estate along with general business, health, construction, lawyers and lobbyists and transportation companies.

About the Author: Jason Vaughn, Media Coordinator for The Tennessee Conservative  ~ Jason previously worked for a legacy publishing company based in Crossville, TN in a variety of roles through his career.  Most recently, he served as Deputy Director for their flagship publication. Prior, he was a freelance journalist writing articles that appeared in the Herald Citizen, the Crossville Chronicle and The Oracle among others.  He graduated from Tennessee Technological University with a Bachelor’s in English-Journalism, with minors in Broadcast Journalism and History.  Contact Jason at news@TennesseeConservativeNews.com