Oracle Begins Deep Job Cuts Amid AI Spending Crunch

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Oracle has begun informing employees about broad job cuts that could affect thousands of workers, as the tech firm struggles with investor concerns over its aggressive spending on artificial intelligence infrastructure, CNBC reported, citing people aware of the matter.

The layoffs are already being communicated internally, the report said.  Oracle has not made a broad public announcement on the layoffs.

The development was first reported by Business Insider on Tuesday. 

The reported layoff comes as shares of Oracle remain under pressure. The stock rose about 5% on Tuesday as investors welcomed the prospect of cost savings, though the stock is still down about 29% for the year.

Oracle, which had about 162,000 employees as of May 2025, according to its annual report, has been scaling up its cloud and AI infrastructure business to compete more aggressively with larger cloud rivals.

The downturn reflects broader market anxiety around the cost of building AI infrastructure, as well as concerns about how traditional software businesses will fare in an era increasingly shaped by generative AI.

The company has leaned heavily on debt markets to finance its expansion. In January, Oracle announced plans to raise $50 billion through a mix of debt and equity. Although executives later said there were no additional borrowing plans for 2026, investor concerns around rising debt levels and tightening cash flow have persisted.

A January note from TD Cowen suggested that cutting between 20,000 and 30,000 jobs could generate an additional $8 billion to $10 billion in free cash flow, highlighting the scale of potential restructuring underway.

Despite near-term pressures, Oracle has continued to double down on AI as a long-term growth driver.

In September, the company said its remaining performance obligations, a measure of future contracted revenue, had surged 359% to $455 billion. This spike was driven in part by a massive deal worth over $300 billion with OpenAI.

That figure has since climbed further. On Oracle’s fiscal third-quarter earnings call in March, CEO Clay Magouyrk pointed to $553 billion in remaining performance obligations, noting that demand for AI infrastructure continues to outstrip supply.

“Demand for AI infrastructure, both GPU and CPU, continues to exceed supply,” Magouyrk said, reinforcing the company’s view that its investments will pay off over time.

The layoffs also come amid broader changes at the top. In recent months, Oracle named Mike Sicilia and Clay Magouyrk as successors to CEO Safra Catz, signaling a leadership transition as the company pivots deeper into AI and cloud infrastructure.