Oracle plans to cut thousands of jobs as part of its efforts to address funding shortfalls from a massive AI data center expansion.
The layoffs will affect all divisions at the company and could be implemented as early as this month, said the people, who asked not to be identified discussing plans that are still private. Some of the job cuts will be targeted at jobs the company expects to see less demand due to AI, two people said.
Oracle, led by Chairman Larry Ellison, has begun building historic data centers to power AI workloads for customers such as OpenAI. The company has long been known for its database software, but in recent years it has shifted toward building out its cloud computing division with an emphasis on AI, with the aim of becoming a strong competitor to market leaders Amazon.com Inc. and Microsoft Corp.
Wall Street expects spending in its data center cloud division to push Oracle’s cash flow into negative territory over the next few years until it starts recouping its spending in 2030, according to data compiled by Bloomberg. Oracle announced last month that it would raise up to $50 billion this year through a combination of debt and stock sales.
The planned layoffs are expected to be more widespread than the company’s usual gradual layoffs, the people said. Oracle announced internally this week that it would review many job postings in its cloud division, effectively slowing or freezing the hiring process, according to people familiar with the move.
Oracle declined to comment. The company has approximately 162,000 employees worldwide as of the end of May 2025. Workforce reduction plans are still in progress and subject to change, officials said.
Oracle’s initial move as an AI cloud provider has been popular with investors, with the stock up 61% in 2024 and 20% last year. However, as costs increased, the market’s reputation for the company deteriorated, and the stock price fell 54% from its September 2025 high to Wednesday’s close.
The stock regained some of its gains on Thursday following the news, dropping as much as 1.5% to $150.12.
AI’s high upfront costs are spurring cost reductions across the tech industry as companies strive to balance their budgets. Microsoft laid off about 15,000 people last year as it increased spending on data centers and AI software development. Block Inc. announced last week that it would lay off nearly half its workforce, with co-founder Jack Dorsey citing the efficiency-boosting power of AI.
In September, Oracle said in a filing that it plans its largest restructuring in its history, which will cost up to $1.6 billion in the current fiscal year, which ends in May, including severance checks to departing employees. This was significantly larger than other similar plans revealed by Oracle. The company is scheduled to announce third-quarter results on Tuesday.
Mr. Ford writes for Bloomberg.
