San Francisco: US technology giant Oracle is reportedly considering one of the largest workforce reductions in its history, with potential layoffs affecting up to 30,000 employees, as mounting costs tied to artificial intelligence infrastructure place intense pressure on the company’s finances.
If implemented, the layoffs could help Oracle free up an estimated $8 to $10 billion in cash flow, resources the company urgently needs to sustain its rapidly expanding AI operations.
At the core of Oracle’s financial strain is its aggressive push into AI infrastructure. According to TD Cowen’s assessment, Oracle’s commitment linked to OpenAI alone could require capital expenditure of around $156 billion over time.
This includes the deployment of nearly three million high-end graphics processing units (GPUs) and the construction of multiple hyperscale data centres designed to support advanced AI workloads.
In just two months, Oracle has reportedly added $58 billion in debt, including $38 billion for data centre projects in Texas and Wisconsin and another $20 billion for a major campus in New Mexico.
Rising Debt and Market Impact
Oracle’s total debt is now estimated to have crossed $100 billion, raising concerns among investors and lenders. Since September 2025, the company’s stock has lost more than half its value, wiping out approximately $463 billion in market capitalisation.
The sharp decline reflects growing unease over whether Oracle can balance its traditional enterprise software business with the capital-intensive demands of AI infrastructure.
Market analysts say the situation highlights the risks faced by legacy technology firms racing to keep pace with AI leaders.
US Banks Pull Back on Financing
The strain is not limited to Oracle’s balance sheet. Several US banks have reportedly pulled back from financing Oracle-linked data centre projects, citing heightened risk.
According to TD Cowen, lenders have nearly doubled the interest rate premiums charged to Oracle since late 2025, pushing borrowing costs closer to levels typically associated with junk-rated companies.
This pullback has stalled several planned data centre leases, limiting Oracle’s ability to deliver capacity to key customers, including OpenAI.
Cost-Cutting Measures Under Consideration
In response, Oracle is exploring multiple cost-saving and cash-generating measures. Reports suggest the company is now asking new customers to pay up to 40 per cent of contract value upfront, effectively sharing the burden of infrastructure costs.
Oracle is also considering “bring your own chip” arrangements, where clients provide their own hardware for AI workloads, reducing Oracle’s upfront spending.
Additionally, the company is said to be weighing a potential sale of Cerner, the healthcare software firm it acquired for $28.3 billion in 2022.
OpenAI Diversifies Its Options
Adding to Oracle’s challenges, TD Cowen noted that OpenAI has already begun shifting some of its near-term capacity needs to other cloud providers, including Microsoft and Amazon.
While this does not signal an end to the Oracle partnership, it raises questions about Oracle’s ability to meet delivery timelines amid funding constraints.
Oracle has not issued an official statement on the reported layoffs or the financing challenges so far.
Global Implications for the Tech Sector
The developments come amid broader concerns about the sustainability of massive AI investments across the global technology sector. Several experts warn that heavy borrowing and overbuilding could trigger a new wave of layoffs if returns fail to materialise quickly.