Oracle weighs cutting up to 30,000 jobs to fund $156 billion AI data centre expansion

Oracle Could Cut 30,000 Jobs to Fund AI Data Centre Expansion

The job cuts will reportedly free up between 8-10 billion in cash flow Oracle is reportedly considering cutting between 20,000 and 30,000 jobs to fund its artificial intelligence (AI) data centre buildout. As per the report, several US banks have backed out of funding the company's ambitious plans to build AI data centres after raising questions about the company's ability to handle such a large-scale project. Interestingly, the company partnered with OpenAI, SoftBank, and others last year for The Stargate Project, which aimed to develop AI infrastructure in the US and globally. Oracle Layoffs Could Reportedly Impact 30,000 Jobs According to a report by CIO, the Texas-based cloud giant is planning to cut between 20,000 and 30,000 jobs as US banks retreat from its AI data centre expansion project. Citing data from investment bank TD Cowen, the report added that Oracle might be forced to sell some of its business units to fund the ongoing expansion. The large-scale layoff could reportedly free up between $8 billion (roughly Rs. 73,245 crore) and $10 billion (roughly Rs. 91,560 crore) in cash flow. However, this is said not to be enough for the buildout, and the company might reportedly sell its healthcare software unit, Cerner, to acquire additional funds. Notably, Oracle acquired Cerner in 2022 for $28.3 billion (roughly Rs. 2.59 lakh crore). As per the TD Cowen research data cited by CIO, multiple US banks have backed out from funding Oracle's data centre project. It is said that the investors have doubts about the company's ability to finance the build-out while ensuring sustainable business operations. Based on Oracle's current infrastructure commitments, of which The Stargate Project is a part, the company reportedly requires $156 billion (roughly Rs. 14.28 lakh crore) in capital expenditure. The report claims that Oracle had raised significant funds from debt markets and is incapable of raising any further funds, which has led to the consideration of such drastic measures. Increased borrowing costs have reportedly stalled data centre lease deals that were under negotiation with private operators, which has emerged as another barrier for the company. Oracle's ongoing struggles underscore the loosely forged deals in the AI space that experts have warned about. Whether it is the start of the AI bubble finally bursting will be revealed in due course of time.

Oracle plans to slash headcount by 20,000-30,000 to pay for AI data centres: Report - The Economic Times

These job cuts are likely to help ease the mounting financing pressures linked to Oracle's multiyear cloud infrastructure commitments, including a major contract to provide compute capacity for OpenAI and other AI customers.Oracle is weighing deep cost cuts, including the potential layoffs of 20,000 to 30,000 employees, as it scrambles to fund its aggressive build‑out of AI data centres, according to a research note from investment bank TD Cowen. These job cuts are likely to help ease the mounting financing pressures linked to Oracle's multiyear cloud infrastructure commitments, including a major contract to provide compute capacity for OpenAI and other AI customers. As per TD Cowen, the OpenAI‑related build‑out alone could require around three million GPUs and about $156 billion in capital spending over five years. A headcount reduction on this scale could free up $8 billion to $10 billion, the report said. This comes as Oracle said it expects to raise $45 billion to $50 billion in 2026 to build additional capacity for its ⁠cloud infrastructure. The Larry Ellison-led company plans to achieve its funding objectives using a combination of debt and equity financing. "Oracle is raising money in order to build additional capacity to meet the contracted demand from our largest Oracle Cloud Infrastructure customers, including AMD, Meta, NVIDIA, OpenAI, TikTok, xAI and others," the company said in a statement on Monday. At the end of 2025, the company laid off over 3,000 employees globally, as per reports. ET had reported that about 100 employees in India were impacted. Oracle's troubles Investors have scrutinised Oracle's AI infrastructure build-out in recent weeks as its debt climbs and its fortunes become increasingly tied to OpenAI, which is not profitable and has not detailed how it would finance its infrastructure ⁠plans. Oracle was sued ⁠earlier this month by bondholders, who say they suffered losses because the company concealed its need to sell significant additional debt to build out its artificial intelligence infrastructure. The cost of insuring Oracle's debt against default surged in December last year to its highest level in at least five years.

Oracle Plans Up to 30,000 Layoffs to Fund Massive AI Push

Oracle has not yet issued an official statement on the reported job cuts. TD Cowen flagged growing concerns among equity and debt investors over Oracle's ability to finance its . Several US banks have reportedly pulled back from lending to the company in recent weeks, tightening access to capital. The strain has already affected Oracle's expansion plans. TD Cowen estimates the company requires around $156 billion in capital expenditure to scale its AI data centre capacity, including projects tied to OpenAI. Some data centre leases under negotiation with private operators failed to secure financing, preventing Oracle from locking in capacity through leases, the report said. "Both equity and debt investors have raised questions regarding Oracle's ability to finance this buildout," TD Cowen noted.