Oracle Corp. Plans Significant Layoffs Amid AI Expansion Costs
(Bloomberg) — Oracle Corp. is poised to implement substantial workforce reductions as part of its strategy to navigate a financial shortfall linked to an ambitious expansion of AI data centers.
The impending layoffs are expected to span various divisions within the organization and could commence as early as this month, according to sources familiar with the situation who preferred to remain anonymous due to the sensitive nature of the planning.
Reports indicate that certain cuts will target roles deemed less essential as a consequence of advancements in artificial intelligence, as noted by two of the informants.
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Under the leadership of Chairman Larry Ellison, Oracle is undertaking an extensive construction initiative for data centers, aimed at supporting AI workloads for clients such as OpenAI.
Once primarily recognized for its database software, the company has progressively shifted its focus over the past few years, enhancing its cloud computing division with an emphasis on AI capabilities.
This strategic move intends to position Oracle as a formidable contender against established giants like Amazon.com Inc. and Microsoft Corp.
Financial analysts on Wall Street predict that expenses related to the cloud unit’s data center initiatives will drive Oracle’s cash flow into negative territory in the near term, with a potential recovery only projected by 2030, according to Bloomberg data.
Last month, Oracle announced plans to raise up to $50 billion this year through a combination of debt and equity sales.
The anticipated job reductions are expected to be broader in scope than the company’s usual periodic cuts.
Recently, Oracle communicated internally the intention to assess numerous open positions within the cloud division, effectively decelerating or halting the hiring process, as revealed by individuals aware of these developments.
Oracle did not provide a comment on the situation. As of the end of May 2025, the company employed approximately 162,000 individuals worldwide. Plans for workforce reductions remain fluid and could evolve, according to the aforementioned sources.
Oracle’s initial foray as an AI cloud provider garnered significant favor among investors, resulting in a 61% surge in stock value in 2024 and a 20% increase the following year.
However, escalating costs have led to a negative market sentiment regarding the company, with shares plummeting 54% from their peak in September 2025 to Wednesday’s close.
Subsequent to the announcement, Oracle’s stock witnessed a decline, dropping as much as 1.5% to $150.12 on Thursday, reversing earlier gains.
The substantial up-front expenses connected to AI endeavors have prompted widespread layoffs within the technology sector as companies seek to manage their financial frameworks.
In a similar vein, Microsoft laid off approximately 15,000 employees last year due to increasing expenditures on data centers and AI software development.
Recently, Block Inc. disclosed plans to reduce its workforce by nearly half, with co-founder Jack Dorsey attributing this decision to the efficiency-enhancing capability of AI.
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