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

Oracle Faces Mounting Financial Pressures Over AI Infrastructure

Oracle is weighing drastic cost-cutting measures that could see 20,000 to 30,000 employees lose their jobs as the Texas-based cloud giant scrambles to fund its ambitious AI data centre expansion1

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. According to research from investment bank TD Cowen, these job cuts would free up between $8 billion and $10 billion in cash flow, though this amount falls short of what Oracle needs for its aggressive buildout2

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. The move comes as several US banks have backed out of funding the company's AI infrastructure projects, raising questions about Oracle's ability to manage such large-scale operations while maintaining sustainable business practices.

Capital Expenditure Requirements Strain Oracle Funding Strategy

The scale of Oracle's financial challenge is staggering. Based on its current cloud infrastructure commitments, the company requires approximately $156 billion in capital expenditure over the next five years1

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. The OpenAI partnership alone could demand around three million GPUs and massive compute capacity investments2

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. Oracle has stated it expects to raise $45 billion to $50 billion in 2026 using a combination of debt and equity financing to build additional capacity for cloud customers including AMD, Meta, NVIDIA, OpenAI, TikTok, and xAI2

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. However, TD Cowen reports that Oracle has already raised significant funds from debt markets and is incapable of raising further capital through traditional channels1

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Investor Concerns Mount as Borrowing Costs Rise

Both equity and debt investors have raised serious concerns regarding Oracle's ability to finance this buildout, according to TD Cowen3

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. The financial pressures have already produced tangible consequences. Increased borrowing costs have stalled data centre lease deals that were under negotiation with private operators, preventing Oracle from securing capacity through alternative arrangements1

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. The cost of insuring Oracle's debt against default surged in December to its highest level in at least five years2

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. Adding to the company's troubles, bondholders sued Oracle earlier this month, alleging the company concealed its need to sell significant additional debt to build out its AI infrastructure2

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Cerner Sale and The Stargate Project Implications

Even with massive job cuts, Oracle may need to sell business units to generate sufficient capital. The company is reportedly considering divesting its healthcare software unit, Cerner, which Larry Ellison's company acquired in 2022 for $28.3 billion1

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. This potential sale comes as Oracle's fortunes become increasingly tied to The Stargate Project, a partnership with OpenAI, SoftBank, and others aimed at developing AI infrastructure in the US and globally1

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. At the end of 2025, Oracle already laid off over 3,000 employees globally, with about 100 employees in India impacted2

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. Oracle's struggles underscore concerns about loosely forged deals in the AI space, with some experts questioning whether this signals the start of an AI bubble bursting1

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