(Bloomberg) — Oracle Corp. is preparing to cut thousands of jobs as it navigates a financial crunch stemming from a significant expansion of data centers to support artificial intelligence operations. The layoffs are expected to impact multiple divisions within the company and could begin as early as this month, according to individuals familiar with the plans who requested anonymity due to the confidential nature of the discussions. Some job reductions will target categories that Oracle anticipates will see decreased demand as a result of AI advancements, sources indicated.
Under the leadership of Chairman Larry Ellison, Oracle is undertaking a major build-out of its data center infrastructure to manage AI workloads for key clients, including OpenAI. The company, traditionally known for its database software, has been pivoting over the past few years to enhance its cloud computing capabilities with a strong emphasis on AI. This strategy aims to position Oracle as a formidable competitor against industry leaders such as Amazon.com Inc. and Microsoft Corp..
Financial analysts project that the investments made by Oracle’s cloud division in data center construction will push the company’s cash flow into negative territory in the coming years, with expectations for a turnaround not occurring until 2030. Last month, Oracle announced plans to raise up to $50 billion this year through various debt and equity offerings.
The planned workforce reductions are anticipated to be more extensive than the company’s usual periodic job cuts. This week, Oracle communicated internally that it would be reassessing many open positions within its cloud division, effectively slowing or halting hiring efforts, according to sources with knowledge of the situation.
Oracle opted not to comment on the reported layoffs. The company had approximately 162,000 employees worldwide as of May 2025. The process of planning these workforce reductions remains active and could evolve, sources noted.
Investor response to Oracle’s initial moves as an AI cloud provider has been generally positive, with the company’s stock rising 61% in 2024 and an additional 20% last year. However, increasing costs have led to a decline in market sentiment, with Oracle’s shares falling 54% from their peak in September 2025 through the previous day’s close. Following news of the impending job cuts, Oracle’s stock experienced a dip, losing as much as 1.5% to trade at $150.12.
The substantial upfront costs associated with AI development have prompted widespread layoffs across the technology sector as companies strive to balance their financials. For instance, Microsoft announced layoffs of approximately 15,000 employees last year as it faced rising expenses linked to data centers and AI software. Just last week, Block Inc. revealed plans to reduce its workforce by nearly half, with co-founder Jack Dorsey highlighting the efficiency-enhancing potential of AI.
As the technology landscape continues to evolve, Oracle’s strategic decisions regarding workforce management and capital allocation will be closely scrutinized. The ramifications of these layoffs will extend beyond immediate cost savings, potentially reshaping the company’s operational structure and its capacity to compete in an increasingly AI-driven market.
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