Oracle is reportedly preparing for its biggest round of layoffs ever, with between 20,000 and 30,000 jobs at risk worldwide. The company is under financial strain as it pushes ahead with a massive plan to build AI data centres, largely to support its $300 billion partnership with OpenAI. Cutting jobs could save Oracle $8 to $10 billion in cash flow, which it desperately needs to fund these projects.
In just two months, Oracle is said to have already borrowed $58 billion—$38 billion for new facilities in Texas and Wisconsin, and $20 billion for a campus in New Mexico. Its total debt has reportedly now crossed $100 billion, and analysts estimate the company will need about $156 billion in capital spending to complete its infrastructure commitments.
To reduce pressure, Oracle is also considering selling Cerner, its healthcare software unit acquired in 2022 for $28.3 billion. The restructuring comes as US banks have pulled back from financing Oracle’s data-centre projects, raising concerns about the company’s ability to sustain such large-scale expansion.
This retreat by lenders has reportedly sharply increased borrowing costs. Interest rate premiums charged to Oracle have doubled since September, reaching levels usually reserved for riskier companies. As a result, several data-centre lease deals have stalled because private operators cannot secure financing, creating bottlenecks in Oracle’s rollout.
Media reports say that investors may be worried about Oracle’s heavy reliance on debt markets and whether it can continue funding its ambitious AI buildout. Without adequate financing, the company risks delays in securing the data-centre capacity it needs.
Simply put, Oracle is facing intense financial challenges as it pursues what is probably one of the largest infrastructure projects in tech history. Job cuts and asset sales are now on the table as the company tries to balance its workforce, debt obligations, and long-term commitment to AI growth.