Oracle may slash 30,000 jobs amid struggle to finance AI data centres

Oracle

• Oracle may lay off up to 30,000 employees to fund AI data centre expansion
• Layoffs could generate $8-10 billion in free cash flow for Oracle
• Oracle considers selling Cerner and BYOC model to ease infrastructure costs

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Oracle is preparing for what could be one of the biggest job cuts in its history as it struggles to fund an ambitious push into artificial intelligence data centres. According to a report by CIO, citing research from investment bank TD Cowen, the US tech giant may lay off between 20,000 and 30,000 employees in the coming months.

The proposed layoffs are part of a broader cost-cutting effort aimed at freeing up cash for massive investments in AI infrastructure. TD Cowen estimates that the job cuts alone could help Oracle generate around $8 billion to $10 billion in free cash flow. So far, however, Oracle has not issued any official statement confirming the plans.

The pressure is coming from the sheer scale of Oracle’s AI ambitions. The company has been aggressively expanding its data centre capacity to support AI workloads, including projects linked to OpenAI. TD Cowen estimates Oracle’s total capital expenditure needs for this expansion at a staggering $156 billion. But raising that kind of money has proven difficult.

In recent weeks, several US banks have reportedly pulled back from lending to Oracle for its data centre buildout. According to the TD Cowen report, both equity and debt investors are increasingly questioning whether Oracle can realistically finance such a large expansion. These financing issues have already started affecting Oracle’s ability to close data centre leases, with some deals failing because private operators could not secure funding.

To cope with the crunch, Oracle is exploring several alternative measures. One major step under consideration is the sale of its healthcare software unit Cerner, which Oracle acquired in 2022 for $28.3 billion. The company is also rethinking how it builds infrastructure for new customers.

One such idea is a “bring your own chip” or BYOC model. Under this arrangement, new clients would supply their own hardware, effectively shifting some of the infrastructure costs off Oracle’s balance sheet. TD Cowen says Oracle has already begun pushing this requirement in certain cases.

If the layoffs go through, they would surpass Oracle’s previous round of cuts in late 2025, when the company let go of about 10,000 employees as part of a $1.6 billion restructuring plan. The timing is also notable, coming soon after reports of Amazon cutting thousands of jobs as it restructures around AI.

Despite the challenges, Oracle is pressing ahead with its cloud plans. The company expects to raise between $45 billion and $50 billion in 2026 to build additional cloud capacity. For now, though, the reported layoffs underline a growing reality across the tech industry: the AI boom is expensive, and even the biggest players are feeling the financial strain.