The latest news shows that Oracle in the United States is planning to cut thousands of jobs to cope with the financial constraints caused by its large-scale artificial intelligence (AI) data center expansion plan. The layoffs will affect multiple business units of the company and could be implemented as early as this month, according to people familiar with the matter. Two of the people said that some of the layoffs will be concentrated in job categories that the company believes will be in less demand in the future due to the development of AI.
Under the leadership of Chairman Larry Ellison, Oracle is embarking on a historic expansion plan to build large-scale data centers to provide AI computing power to customers including OpenAI.
Oracle, long known for its database software, has been accelerating its transformation to cloud computing in recent years and has focused on AI in an attempt to become a strong competitor to market leaders Amazon, Microsoft and Google.
Wall Street overall expects Oracle's cloud computing unit's data center spending to push the company's cash flow into negative territory in the next few years, with those investments not starting to pay off until around 2030.
Last month, Oracle said it would raise up to $50 billion in debt and equity financing this year.
The scope of the planned layoffs is expected to exceed the company's usual "rolling" layoffs, people familiar with the matter said. This week, Oracle also announced internally that it would re-examine a large number of open positions in its cloud department and may slow down or even freeze the hiring process.
Data shows that as of May 2025, Oracle has approximately 162,000 employees worldwide. People familiar with the matter said the layoff plan is still being formulated and specific plans may still be adjusted.
In September last year, Oracle disclosed in a document that the company was advancing the largest restructuring plan in history, which may cost as much as $1.6 billion in the fiscal year ending in May, including severance costs for departing employees.
Oracle's initial layout as an AI cloud service provider was sought after by investors. The company's stock price rose 61% in 2024 and another 20% last year. However, as input costs continue to rise, market sentiment has begun to turn cold, and the stock price has halved from the high point in September last year.
The high upfront investment in AI is driving a wave of layoffs in the technology industry, with companies seeking a balance between expanding investment and controlling costs.
Last year, Microsoft laid off about 15,000 people while increasing spending on data centers and AI software development. Last week, Block also announced that it would lay off nearly half of its employees. Its co-founder Jack Dorsey said that AI is significantly improving efficiency.