Oracle plans massive layoffs as AI expansion triggers financial strain

Up to 30,000 jobs at risk as debt, costly data centres and OpenAI partnership pressure the tech giant

Global technology major Oracle is facing intense financial pressure and is reportedly planning a large-scale workforce reduction, with 20,000 to 30,000 employees likely to be laid off in the coming months. The move is aimed at controlling cash outflow amid rising costs linked to the company’s aggressive push into artificial intelligence infrastructure.

According to a research note by investment bank TD Cowen, Oracle is struggling to absorb the heavy financial burden required to expand its AI-focused data centres. The report estimates that the proposed layoffs could help the company conserve between $8 billion and $10 billion in cash flow.

A key factor behind the crisis is Oracle’s massive investment in AI infrastructure. Major US banks have reportedly shown reluctance to fund Oracle’s AI data centre projects. The company’s total debt has already crossed $100 billion, and lenders have doubled interest rates, increasing repayment pressure. As a result, Oracle is now seriously evaluating the sale of certain assets and business operations.

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Market analysts point to Oracle’s $300 billion partnership with OpenAI as a major contributor to the current strain. Oracle had committed to supplying nearly three million GPUs, a promise that has now turned into a heavy financial obligation. The impact has been severe, with Oracle’s share value falling by over 50 percent, wiping out nearly $463 billion in market capitalisation.

In recent months alone, Oracle has reportedly spent $58 billion on data centre development in Texas and New Mexico, further tightening liquidity.

To stabilise finances, Oracle has begun implementing new commercial strategies. New customers are being asked to pay 40 percent of contract value upfront as an advance deposit. The company is also exploring the sale of Cerner, the healthcare technology firm acquired in 2022. Additionally, Oracle is considering a “Bring Your Own Chip” model, allowing customers to use their own hardware, effectively turning them into co-investors.

Meanwhile, reports suggest that OpenAI has started shifting part of its capacity requirements to Microsoft and Amazon, reflecting reduced confidence in Oracle’s ability to meet future demands.

Oracle has not issued any official statement on the reported layoffs so far. The situation has raised serious concerns across the global technology industry, as a company aiming to dominate the AI space now finds itself navigating a deep financial challenge, with employee futures hanging in the balance.