Oracle Faces Biggest Job Cuts in History as 300 Billion AI Gamble Backfires

Oracle Corporation is contemplating slashing between 20,000 and 30,000 positions in what could become the largest workforce reduction in the tech giant's history, according to a new report by investment bank TD Cowen. The dramatic move comes as the software powerhouse scrambles to finance an ambitious $156 billion artificial intelligence infrastructure buildout amid a sudden banking sector retreat. 

The crisis stems from a dramatic shift in lender sentiment since September 2025, when US banks roughly doubled the interest rate premiums they charge Oracle for data-center project financing. TD Cowen analysts noted that "both equity and debt investors have raised questions regarding Oracle's ability to finance this buildout," with multiple data-center leases struggling to secure backing. The funding crunch has left Oracle desperately searching for cash to maintain its AI infrastructure commitments, particularly those tied to its partnership with OpenAI. 

The proposed layoffs would free up between $8 billion and $10 billion in cash flow, according to TD Cowen's calculations. This represents a massive escalation from Oracle's late 2025 restructuring, which eliminated approximately 10,000 positions as part of a $1.6 billion cost-cutting initiative. The new cuts would affect roughly 15-20% of Oracle's global workforce, dwarfing previous reductions and marking the most aggressive downsizing in the company's modern era. 

Oracle's financial strain centers on a reported $300 billion partnership with Sam Altman's OpenAI, which drove the company to lease approximately 5.2 gigawatts of US data center capacity across Texas, Wisconsin, Michigan, and New Mexico. However, capacity shortfalls and project delays have soured the relationship, prompting OpenAI to redirect its near-term computing requirements to Microsoft and Amazon. The shift represents a devastating blow just months after Oracle committed massive resources to serve OpenAI's infrastructure needs. 

Beyond workforce reductions, Oracle is exploring asset sales, including the potential divestiture of its Cerner healthcare software subsidiary, to generate additional capital. The company has already implemented emergency revenue strategies, including demanding up to 40% of contract value upfront from new customers and exploring a "bring your own chip" model in which clients supply their own hardware. Despite these challenges, Oracle has told investors it plans to raise between $45 billion and $50 billion in 2026 to continue building cloud capacity. However, with lenders retreating and borrowing costs soaring, the company faces an uncertain path forward in an increasingly competitive market.  

Oracle has not issued an official comment on the reported layoffs as of this publication.