diff --git a/core/src/main/java/org/apache/iceberg/LocationProviders.java b/core/src/main/java/org/apache/iceberg/LocationProviders.java
index c842f0e922d5..237284ca44fe 100644
--- a/core/src/main/java/org/apache/iceberg/LocationProviders.java
+++ b/core/src/main/java/org/apache/iceberg/LocationProviders.java
@@ -109,6 +109,10 @@ static class ObjectStoreLocationProvider implements LocationProvider {
     private static final HashFunction HASH_FUNC = Hashing.murmur3_32_fixed();
     // the starting index of the lower 20-bits of a 32-bit binary string
     private static final int HASH_BINARY_STRING_START_INDEX = 12;
+    // Entropy generated will be divided into dirs with this lengths
+    private static final int ENTROPY_DIR_LENGTH = 4;
+    // Will create DEPTH many dirs from the entropy
+    private static final int ENTROPY_DIR_DEPTH = 3;
     private final String storageLocation;
     private final String context;
     private final boolean includePartitionPaths;
@@ -160,7 +164,13 @@ public String newDataLocation(String filename) {
       if (context != null) {
         return String.format("%s/%s/%s/%s", storageLocation, hash, context, filename);
       } else {
-        return String.format("%s/%s/%s", storageLocation, hash, filename);
+        // if partition paths are included, add last part of entropy as dir before partition names
+        if (includePartitionPaths) {
+          return String.format("%s/%s/%s", storageLocation, hash, filename);
+        } else {
+          // if partition paths are not included, append last part of entropy with `-` to file name
+          return String.format("%s/%s-%s", storageLocation, hash, filename);
+        }
       }
     }
 
@@ -187,7 +197,39 @@ private String computeHash(String fileName) {
       // {@link Integer#toBinaryString} excludes leading zeros, which we want to preserve.
       // force the first bit to be set to get around that.
       String hashAsBinaryString = Integer.toBinaryString(hashCode.asInt() | Integer.MIN_VALUE);
-      return hashAsBinaryString.substring(HASH_BINARY_STRING_START_INDEX);
+      return dirsFromHash(hashAsBinaryString.substring(HASH_BINARY_STRING_START_INDEX));
+    }
+
+    /**
+     * Divides hash into directories for optimized orphan removal operation using ENTROPY_DIR_DEPTH
+     * and ENTROPY_DIR_LENGTH
+     *
+     * @param hash 10011001100110011001
+     * @return 1001/1001/1001/10011001 with depth 3 and length 4
+     */
+    private String dirsFromHash(String hash) {
+      if (hash.length() < ENTROPY_DIR_DEPTH * ENTROPY_DIR_LENGTH) {
+        throw new IllegalArgumentException(
+            String.format(
+                "Generated hash length needs to be at least %d chars long.",
+                ENTROPY_DIR_DEPTH * ENTROPY_DIR_LENGTH));
+      }
+      StringBuilder hashWithDirs = new StringBuilder();
+
+      for (int i = 0; i < ENTROPY_DIR_DEPTH * ENTROPY_DIR_LENGTH; i += ENTROPY_DIR_LENGTH) {
+        if (i > 0) {
+          hashWithDirs.append("/");
+        }
+        hashWithDirs.append(hash, i, Math.min(i + ENTROPY_DIR_LENGTH, hash.length()));
+      }
+
+      if (hash.length() > ENTROPY_DIR_DEPTH * ENTROPY_DIR_LENGTH) {
+        hashWithDirs
+            .append("/")
+            .append(hash, ENTROPY_DIR_DEPTH * ENTROPY_DIR_LENGTH, hash.length());
+      }
+
+      return hashWithDirs.toString();
     }
   }
 }
diff --git a/core/src/test/java/org/apache/iceberg/TestLocationProvider.java b/core/src/test/java/org/apache/iceberg/TestLocationProvider.java
index e10ee8e231d7..7edba51c3d85 100644
--- a/core/src/test/java/org/apache/iceberg/TestLocationProvider.java
+++ b/core/src/test/java/org/apache/iceberg/TestLocationProvider.java
@@ -278,12 +278,12 @@ public void testObjectStorageWithinTableLocation() {
     String fileLocation = table.locationProvider().newDataLocation("test.parquet");
     String relativeLocation = fileLocation.replaceFirst(table.location(), "");
     List<String> parts = Splitter.on("/").splitToList(relativeLocation);
-
-    assertThat(parts).hasSize(4);
+    assertThat(parts).hasSize(7);
     assertThat(parts).first().asString().isEmpty();
     assertThat(parts).element(1).asString().isEqualTo("data");
-    assertThat(parts).element(2).asString().isNotEmpty();
-    assertThat(parts).element(3).asString().isEqualTo("test.parquet");
+    // entropy dirs in the middle
+    assertThat(parts).elements(2, 3, 4, 5).asString().isNotEmpty();
+    assertThat(parts).element(6).asString().isEqualTo("test.parquet");
   }
 
   @TestTemplate
@@ -318,20 +318,20 @@ public void testExcludePartitionInPath() {
     String fileLocation =
         table.locationProvider().newDataLocation(table.spec(), partitionData, "test.parquet");
 
-    // no partition values included in the path
-    assertThat(fileLocation).endsWith("/data/01101010001111101000/test.parquet");
+    // no partition values included in the path and last part of entropy is seperated with "-"
+    assertThat(fileLocation).endsWith("/data/0110/1010/0011/11101000-test.parquet");
   }
 
   @TestTemplate
   public void testHashInjection() {
     table.updateProperties().set(TableProperties.OBJECT_STORE_ENABLED, "true").commit();
     assertThat(table.locationProvider().newDataLocation("a"))
-        .endsWith("/data/01010110100110110010/a");
+        .endsWith("/data/0101/0110/1001/10110010/a");
     assertThat(table.locationProvider().newDataLocation("b"))
-        .endsWith("/data/11100111111000000011/b");
+        .endsWith("/data/1110/0111/1110/00000011/b");
     assertThat(table.locationProvider().newDataLocation("c"))
-        .endsWith("/data/00101101011001011111/c");
+        .endsWith("/data/0010/1101/0110/01011111/c");
     assertThat(table.locationProvider().newDataLocation("d"))
-        .endsWith("/data/10010001010001110011/d");
+        .endsWith("/data/1001/0001/0100/01110011/d");
   }
 }