Oracle to Cut More Jobs as AI Data Center Costs Soar

Oracle is getting ready for more job cuts, and the timing says a lot about where the money is going. The company wants to trim payroll before its second quarter starts on Sept. 1, according to an internal document seen by Business Insider.

Some teams could see reductions in the double-digit percentage range. Managers have been asked to submit lists of affected employees, and the cuts are part of a broader effort to keep costs down while Oracle borrows heavily to build out AI infrastructure.

Oracle declined to comment on the plans.

The Numbers Behind the Cuts

Oracle's workforce is shrinking even as its spending grows. The company ended its most recent fiscal year with about 141,000 employees, down from where it started. The drop of 21,000 people, or 13%, included layoffs that happened earlier in the year.

That's the puzzle at the heart of this story. Oracle is cutting people while pouring record amounts of cash into data centers and chips. In fiscal 2026, the company put $55.7 billion into infrastructure like new data centers.

That's an enormous pile of money, and it outstripped what the business brought in. Oracle's cash outflow exceeded its incoming cash by $23.7 billion for the year.

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To cover that gap, Oracle raised $43 billion from debt and $5 billion from stock in fiscal 2026. It expects to bring in about $40 billion more from debt and stock in the current fiscal year. Translation: Oracle is borrowing heavily today because it believes the AI buildout will pay off tomorrow.

Why the Spending Spree Is Happening Now

The reason for all this spending is simple: demand. In the latest annual period, Oracle's revenue rose 17%, while its cloud infrastructure segment expanded 77% thanks to surging AI computing needs. Companies want the computing power that AI requires, and Oracle is trying to build enough data centers to serve them.

This is a big shift for a company that historically leaned on database software sales. Oracle used to sell software that lived on customers' own computers. Now it's building massive data centers and renting out computing power, which takes a lot more money upfront.

But here's the tension Wall Street is watching. Even companies that are winning from the AI boom feel pressure to weigh their enormous spending against what investors expect in profits. Oracle's stock has fallen nearly 26% this year, and part of that drop reflects wider worries about climbing infrastructure spending across the industry.

There's another fear mixed in too: that AI could replace traditional software and hurt the companies that sell it. Oracle's chairman, Larry Ellison, downplayed those concerns on a March earnings call. He said he expects what he called the "SaaSpocalypse" to affect other firms, not Oracle.

What It Means for Your Portfolio

The story here is about trade-offs. Oracle is betting big on AI infrastructure, and that bet is reshaping the company from the inside out. Layoffs are one way to free up cash for the buildout.

Debt is another. The question is whether the payoff arrives before the bills get too heavy.

The bottom line: Oracle sees AI demand as a once-in-a-generation opportunity, and it's willing to cut staff and borrow heavily to chase it. For investors, the risk is that the spending takes longer to turn into profits than anyone expects. The reward, if it works, is a company that has transformed itself into a major player in cloud computing.

That's why the stock movement matters. When a company borrows this much and cuts jobs at the same time, investors want to see results - not just promises about the future.

The AI boom is real, and Oracle is right in the middle of it. But as the layoffs show, even the companies at the center of the boom have to make hard choices about where the money goes.

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