Oracle is said to be planning the largest layoff in its history as the tech giant is facing financial challenges due to its massive investment in artificial intelligence infrastructure. According to the latest information, the layoffs could affect thousands of employees in various departments, and the process could begin as early as this month.
If the move is implemented, the layoffs could turn out to be the largest in Oracle’s history. In its filing with the Securities and Exchange Commission in September, the tech giant said the restructuring plan could cost the company up to $1.6 billion in the current fiscal year, primarily due to severance packages for the employees who could end up being laid off.
According to sources, the layoffs could affect various business units in the company. Some jobs could also be at risk of being made redundant due to the introduction of AI, which could replace human resources.
Meanwhile, Oracle has reportedly reduced its hiring pace for its cloud division. The company has reportedly started reviewing its existing job listings internally as part of its cost-cutting measures, as announced recently.
Currently, as of May 2025, Oracle has approximately 162,000 employees worldwide. The company has not made any official comments on the news, and the planning for the layoffs is still in process, so the number of layoffs may vary.
Why Is Oracle Planning Massive Layoffs?
The looming layoffs seem to be related to Oracle’s rapid development in artificial intelligence and cloud infrastructure, which demands huge financial investments.
The company’s chairman, Larry Ellison, has been leading an effort to transform Oracle from its traditional role as a database software maker into a leading player in artificial intelligence and cloud computing, enabling it to compete with other industry leaders like Amazon and Microsoft.
As part of this effort, Oracle has partnered with OpenAI in a $300 billion deal to develop large-scale AI data centers and computing infrastructure.
The deal is expected to involve capital spending worth $156 billion and will require nearly three million GPUs to power AI systems and services.
In order to support this expansion, the company has already gone into considerable debt. In fact, it is reported that the company has managed to amass $58 billion in new debt in merely two months. This includes $38 billion for its Texas and Wisconsin data center projects, as well as $20 billion for its new campus in New Mexico.
The total debt of the company has now crossed $100 billion, thanks to these new investments. Analysts predict that the free cash flow of the company is likely to go into the negative in the coming few years, considering the high level of expenditure going into its infrastructure development.
Experts have also estimated that the returns of these new investments are not expected to manifest before 2030.
How Is Oracle’s AI Strategy Affecting Its Stock Performance?
The financial pressure of the company’s massive investment in AI is also having a negative impact on the company’s shares. The shares of Oracle Corporation were performing well, with a rise of 61% in the year 2024 and a further increase of 20% in the following year. However, the scenario has completely changed since September 2025.
Since the company’s shares touched their highest point in September, they have declined by around 54%, resulting in a loss of $463 billion in market capitalization for the company.
The latest news of possible layoffs led to a decline of around 1.5% in Oracle’s shares on Thursday, indicating the concerns of investors related to the financial impact of the company’s AI investment plans.
Why Are Other Tech Companies Also Cutting Jobs?
Oracle is not alone in the technology industry, which is struggling with financial issues as the cost of developing AI is increasing. Many other technology giants have also been forced to reduce their workforce while investing heavily in AI infrastructure.
For instance, Amazon has reduced its workforce by 16,000 employees in January this year, just a few months after it reduced 14,000 employees in October last year. Likewise, Microsoft has reduced its workforce by 15,000 employees last year as it expanded its data centers and AI infrastructure.
Other technology companies have also been forced to take similar measures. Salesforce has reduced its workforce by thousands of employees over the last year as it restructured its operations.
Recently, fintech company Block, Inc. has reduced its workforce by 3,500 employees. According to Jack Dorsey, co-founder of Block, Inc., this reduction is partly because of the company’s focus on becoming more efficient through AI.
How Many Jobs Could Oracle Eventually Cut?
Earlier, analysts at TD Cowen have indicated that Oracle could potentially shed 20,000 to 30,000 jobs in the long run as part of its restructuring efforts. These job cuts could potentially result in an additional $8 billion to $10 billion in cash flow, which could be used to finance its long-term AI infrastructure ambitions.
Banks are also reportedly becoming cautious in financing Oracle’s data center ambitions. There are reports that the interest premiums paid on Oracle’s debt have almost doubled in the last few months since September.
Oracle is reportedly looking to increase its liquidity position by asking new customers to pay up to 40% of the total value upfront. The company is also reportedly considering selling Cerner, a healthcare software company that it acquired for $28.3 billion in 2022.
When Will Oracle Announce Its Next Financial Update?
Oracle is scheduled to release its fiscal third-quarter earnings on March 10. Investors and market analysts will closely watch the results to understand the company’s financial condition, its spending on AI infrastructure, and whether the expected layoffs will officially move forward.
