Due to pressure on money to expand its AI data center, Oracle is planning to lay off about 20,000 to 30,000 employees. The agreement with OpenAI is costing the company heavily and banks are also hesitant in giving loans, due to which this situation has arisen.
Oracle Layoffs: Amidst the pressure of huge funds for the expansion of Artificial Intelligence (AI) data centers, tech giant Oracle is planning to lay off about 20,000 to 30,000 employees. This shocking information has come out in the CIO report quoting a research report by investment bank TD Cowen.
Money challenge in expansion of AI data center
According to a TD Cowen report, major US banks are gradually withdrawing from lending to Oracle’s AI data center expansion plans. As a result, Oracle is said to be considering selling some of its assets and activities. Due to this, the company may make the biggest layoff in its history. The report says that through layoffs, Oracle aims to free up cash flow of about $8 to $10 billion.
‘Investors question Oracle’s financial capability’
“Equity and debt investors are raising serious questions about whether Oracle will be able to raise the money for such a large AI infrastructure,” TD Cowen said in its report. At the center of this problem is Oracle’s famous $300 billion partnership with OpenAI. What initially seemed like a great plan has now become a cause of huge financial pressure for the company.
‘OpenAI deal is weakening Oracle financially’
According to TD Cowen analysis, Oracle has committed about $156 billion in capital expenditures to provide services to OpenAI. For this, around 30 lakh GPUs are said to be required. But in the last two months alone, Oracle has used $58 billion of debt. $38 billion has been spent on data centers in Texas and Wisconsin, and $20 billion has been spent on campuses in New Mexico. With this, the total debt of the company has crossed the $100 billion mark.
Huge fall in share price
Another matter of concern is that Oracle shares, which reached their peak in September 2025, have now fallen to more than half their value. Due to this, there has been a loss of about $ 463 billion in the market capitalization of the company.
American banks are retreating
Oracle’s financial crisis is no longer just an inside matter. Many US banks have quietly stopped lending to Oracle-related data center projects. TD Cowen found that since September, lenders have doubled the interest rate premium for Oracle, pushing the cost of debt to the level of junk-rated companies.
As a result, Oracle has temporarily halted negotiations on several data center leases. As private operators have failed to raise the money to build, Oracle is unable to deliver the capabilities its customers, especially OpenAI, expect.
Discussion of selling Cerner, 40% advance payment from customers
In response to financial pressure, Oracle is requiring new customers to deposit an advance of 40 percent of the contract value. That is, this is an attempt to make customers co-investors in building infrastructure. Apart from this, the company is also considering a model like “Bring Your Own Chip”, in which customers will provide their own chips or hardware. On the other hand, there is also talk of selling the health technology unit ‘Cerner’ purchased for $28.3 billion in 2022. This shows how much priority Oracle is giving to AI infrastructure.
Is OpenAI exploring other options?
OpenAI has begun turning to Microsoft and Amazon for some of its temporary capacity needs, TD Cowen reports. This is being considered a sign that confidence in Oracle’s ability to provide timely service is decreasing.
No official statement from the company
Oracle has not yet given any official statement regarding the news of job cuts and financial pressure. But, these events can have a serious impact on the company’s future, employees’ job security, and relationships with customers.
Layoffs at Oracle: What’s Next?
Oracle, which moved forward with great hopes of becoming a leader in the field of AI, is now going through a difficult period amid financial pressure, hesitation of banks and falling share price. The possibility of cutting 30,000 jobs has become a matter of major debate not only within the company but in the tech sector across the world. In the coming days, it will be interesting to see what strategy Oracle adopts to come out of this crisis.