Oracle is cutting more jobs as it struggles to balance heavy spending on artificial intelligence (AI) infrastructure with financial pressures. The company disclosed in a regulatory filing that it will take on an additional $700 million in restructuring charges, lifting the total cost of its fiscal 2026 plan to $2.8 billion. Most of this money will go toward severance packages and shutting down facilities.
The layoffs come after a year of steep workforce reductions. Oracle’s headcount fell by about 21,000 employees in the year ending May, leaving the enterprise software giant with roughly 1,41,000 workers worldwide. The cuts reflect a broader effort to simplify operations and reduce costs while the company invests aggressively in new technology.
At the heart of the restructuring is Oracle’s push to build massive data centres capable of handling AI workloads for clients such as OpenAI. These projects require gigawatt scale sites and specialised hardware, driving capital expenditure sharply higher. In its latest quarter, Oracle reported negative free cash flow of $5.4 billion, underscoring the strain on its balance sheet.
Management has framed the layoffs as part of efficiency measures designed to protect margins while funding the AI expansion. Investors remain divided: some worry about debt driven spending and rising component costs, while others point to Oracle’s strong contracted revenue backlog, which recently rose by $26 billion to $664 billion. About half of that backlog is expected to convert into sales within three years, offering a path to future growth.
While employees face job insecurity and disruption, Oracle is faced with the challenge of balancing short term pain with long term ambition as it shifts from traditional software to cloud infrastructure at scale.