Oracle may cut 30,000 jobs to fund AI data centers
What's the story
Oracle is reportedly planning to lay off up to 30,000 employees. The move comes as part of the company's efforts to fund its artificial intelligence (AI) data centers. The information was revealed in a report by investment bank TD Cowen and cited by CIO. Along with the layoffs, Oracle is also considering selling some of its operations, including its healthcare software unit Cerner, due to the withdrawal of US banks from investing in these AI data center expansions.
Financial strain
Investors question Oracle's ability to finance AI data center buildout
TD Cowen's report highlighted that both equity and debt investors have questioned Oracle's ability to finance its AI data center buildout. These financing pressures are already affecting the company's customer relationships. Oracle had previously committed to building data centers for OpenAI, as part of a broader project estimated by TD Cowen to cost around $156 billion. However, in recent weeks, several US banks have withdrawn from lending to Oracle for this expansion.
Financial impact
Layoffs could boost Oracle's cash flow
The potential layoffs at Oracle could result in an increase of $8 billion-$10 billion in free cash flow for the company. The financial challenge comes as Oracle is looking to expand its data centers. TD Cowen estimates that the company needs a capital expenditure of $156 billion for this expansion. However, multiple data center leases under negotiation with private operators have struggled to secure financing, preventing Oracle from securing capacity via lease agreements.
Past cuts
Potential layoffs largest in Oracle's recent history
If the layoffs do happen, they would be the largest in Oracle's recent history. The company had cut around 10,000 jobs as part of a $1.6 billion restructuring plan in late 2025. This news comes just days after Amazon announced it would lay off 16,000 workers as part of its own AI restructure plan.
Strategic moves
Oracle exploring chip supply shift for new customers
Along with the layoffs, Oracle is also considering selling its healthcare software unit Cerner, which it had acquired for $28.3 billion in 2022. The company is also exploring a "bring your own chip" (BYOC) arrangement. Under this strategy, new customers will have to supply their own hardware, shifting capital requirements off Oracle's books.