Oracle initiates a new round of large-scale layoffs; AI data center investments continue to ramp up.

Oracle notified employees on Tuesday of a new round of layoffs affecting several thousand people, while it will also continue to pour large sums into building data centers for artificial intelligence (AI) development.

It is understood that the rise of generative AI is intensifying concerns in the market about Oracle’s competitiveness in its core business; meanwhile, the company’s continued increase in its debt burden to drive AI investment has tightened cash flow and also triggered pressure from investors.

As of May 2025, Oracle’s total workforce is about 162,000. While Oracle has refused to comment on the news, multiple media outlets have confirmed it through employees inside the company. On social media, several Oracle employees who claim to be based in the United States and India said their positions have been eliminated.

An email received by an employee reads: “After carefully assessing Oracle’s current business needs, we have decided to eliminate your position.” The exact number of layoffs is not yet clear, but some employees say internal data indicators show the number of layoffs has already reached several thousand.

Due to investor concerns about the feasibility of its data center financing plans, Oracle’s stock price has fallen a cumulative 26% this year, a drop that exceeds that of all major technology peers.

Oracle is still selling its core database products for storing and managing company information. In recent years, as with cloud service providers such as Amazon, Oracle has been increasing capital expenditures to build data center infrastructure capable of supporting AI workloads. However, by comparison, Oracle remains smaller in the cloud computing space.

To support its expansion, the company has long relied on debt-market financing. In January, Oracle announced plans to raise $50 billion in debt and equity funding. However, at last month’s earnings call, executives said there are no plans for further borrowing in 2026.

In September last year, Oracle disclosed that its “remaining performance obligations” (a metric measuring contracted but not yet recognized revenue) surged 359% to $455 billion. This growth was mainly driven by a value exceeding $300 billion agreement reached with OpenAI. A few weeks later, Oracle appointed Mike Sicilia and Clay Magouyrk to serve as co-CEOs, replacing Safra Catz.

In a report in January, TD Cowen analyst said that if the layoff scale reaches 20,000 to 30,000, Oracle could free up an additional $8 billion to $10 billion in free cash flow each year.

Despite the pressure, company executives still emphasized that AI investment will deliver returns in the long term.

Earlier this month on the earnings call, Magouyrk said: “Whether it’s GPUs or CPUs, AI infrastructure demand continues to outpace supply, and this has been directly reflected in the size of our $553 billion remaining performance obligations.”

In addition, Oracle recently disclosed in a regulatory filing that its restructuring costs for the current fiscal year will increase by $500 million compared with its earlier expectations, suggesting that the layoffs plan is accelerating.

（Source: Caixin/財聯社）