Oracle Corporation moved to calm investors after reports said the company discussed cutting 20,000–30,000 jobs as it ramps up spending on AI data centers and cloud capacity.
Oracle has not confirmed plans to lay off up to 30,000 workers, but investment bank TD Cowen reported the company considered reductions of that size to generate $8–10 billion in cash flow for expansion.
Oracle’s stock slipped after the reports, even as analysts tied the cost scrutiny to the scale of infrastructure needed to serve large AI customers, including OpenAI.
The layoff discussions surfaced as Oracle pushes deeper into AI infrastructure, a shift that can require hyperscale-style outlays and tighter discipline on operating costs.
TD Cowen linked the job-cut scenario to an effort to free cash for data centers and related hardware, at a moment when investors have focused on margins and free cash flow across big technology firms.
Oracle’s leadership also addressed a separate point of uncertainty in the AI market: a previously reported $100 billion intended investment involving Nvidia and OpenAI.
Oracle publicly clarified that the stalled $100 billion Nvidia-OpenAI investment is not finalized and has “zero impact” on its partnership with OpenAI.
The company also expressed “high confidence” in OpenAI’s fundraising, while leaving the layoff reports unaddressed in the public comments cited.
Markets have reacted sharply to ambiguity around AI capacity and financing, because multi-year commitments for chips, power, and buildings can lock in spending well before revenue arrives.
That sensitivity has grown as major AI projects concentrate demand among a small number of large buyers, raising questions about customer concentration and the durability of contracts.
TD Cowen framed the potential Oracle cuts as a way to reallocate resources away from legacy areas and toward data center buildout, cloud operations, and customer delivery.
The scale discussed, 20,000–30,000 positions, would represent about 10–20% of Oracle’s 140,000–145,000 global workforce, TD Cowen reported.
Oracle’s last major workforce reset came in 2025, when restructuring eliminated around 10,000 jobs, the reports said.
In parallel with the job-cut discussions, Oracle has expanded its relationship with OpenAI through a $300 billion, five-year contract to provide cloud capacity, a deal that has put a spotlight on how much capital the company must commit.
That contract requires roughly $156 billion in capital spending and 3 million GPUs, the reports said, tying Oracle’s near-term cost structure to the price and availability of AI hardware.
Oracle’s willingness to spend heavily has pushed financing to the center of the story, particularly as lending conditions for data center projects have shifted since late 2025.
Several US banks have reportedly pulled back from financing Oracle’s data center projects, and the reports said interest rate premiums have doubled since September 2025.
The pullback has stalled leases with private operators, according to the reports, limiting one path Oracle could have used to expand capacity without shouldering all costs directly.
Some analysts described layoffs as a painful way to preserve cash when external funding becomes more expensive or less available.
Oracle has also weighed other steps to reduce capital strain, including selling non-core businesses and asking customers to share infrastructure costs under novel financing arrangements, the reports said.
One unit cited is Cerner, the healthcare software business Oracle acquired for $28.3 billion in 2022.
Financing plans have taken on added importance because Oracle recently announced it aims to raise $45–50 billion in 2026 via debt and equity to fund data centers for clients including OpenAI, Nvidia, Meta, AMD, TikTok, and xAI.
The debt component includes one-time senior unsecured bonds, the reports said, a structure that would add to leverage at a time when investors have scrutinized balance sheets tied to AI buildouts.
Oracle’s recent project borrowing has already climbed, with $58 billion in recent debt that includes $38 billion for Texas/Wisconsin centers and $20 billion for New Mexico.
Those borrowings pushed total debt over $100 billion, the reports said, sharpening attention on how quickly Oracle can translate AI infrastructure spending into durable cash flow.
TD Cowen estimated that some AI data center projects could require well over $150 billion in capital expenditures, underscoring why staffing levels and operating costs have become part of the investor debate.
Oracle’s shares have also come under pressure since late 2025, with the reports citing a stock decline of over 50% since a September 2025 peak, wiping out $463 billion in market cap.
The same set of reports also cited a recent 5% premarket surge and 2.4% daily gain on funding news, showing how quickly sentiment has moved as investors reassess AI-related financing capacity.
Jefferies analyst Brent Thill also pointed to continuing funding needs into 2027, the reports said, even as Oracle targets positive free cash flow by FY29.
Against that backdrop, a large reduction in force—if it occurs—could ripple through hiring in software development, cloud engineering, database management, and operations, areas where Oracle employs large numbers of technical staff.
An influx of 20,000–30,000 experienced workers into the job market would likely intensify competition for similar roles across the industry, especially in cloud and infrastructure teams tied to AI workloads.
New graduates and early-career applicants could feel the squeeze if more senior workers seek jobs that might otherwise have gone to entry-level candidates.
The timing risk can be higher for foreign professionals in the United States whose immigration status depends on continued employment, including H-1B and L-1 workers.
The reports said job loss can trigger a 60-day grace period for H-1B holders, and they referenced up to 240 days for compelling circumstances under recent extensions via 2025 USCIS policy.
Such timelines can compress job searches and force faster decisions on sponsorship or status changes, particularly when large layoffs flood the market with candidates.
Students and recent graduates working on OPT face similar pressure from a crowded market, even though the legal structure differs.
The reports said F-1 OPT allows 12 months post-graduation, or 36 for STEM, but competition and slower hiring can tighten the practical runway to secure qualifying work.
Oracle’s global footprint also raises the possibility of broader labor-market effects outside the United States if any cuts extend across international operations.
Workers in India, Europe, and other markets could face similar AI-driven restructuring pressures as large firms recalibrate spending, the reports said.
Oracle’s situation fits a wider tech cycle in which companies spend heavily on AI infrastructure while pursuing cost controls elsewhere.
High capital costs for AI computing have pushed investors to scrutinize return on investment, weighing the promise of new AI products against the immediate expense of chips, power, and construction.
The reports referenced layoffs at major tech companies like Amazon and Meta as part of a wider cost-reset dynamic that has affected tens of thousands of workers over the past year.
That broader context matters to job seekers because the same firms building AI capacity may hire selectively, even as they reduce headcount in other parts of their businesses.
It also matters for visa holders, because sponsorship decisions can tighten when employers prioritize fewer roles or delay backfilling positions during restructuring.
In the near term, Oracle’s clarification about the Nvidia-OpenAI investment structure reduced uncertainty around whether that headline deal directly changes its existing OpenAI relationship.
The larger questions that have driven the layoff rumors, including how Oracle funds data centers at the scale implied by its AI commitments, remain tied to capital markets, leverage, and cost discipline.
Signals that could clarify Oracle’s direction include official company communications, earnings commentary, capex guidance, financing announcements, and major customer capacity commitments, all areas investors have watched as AI spending accelerates.
For workers and global job seekers, the immediate issue is not the status of a single $100 billion plan, but whether the economics of AI infrastructure push Oracle and its peers toward more restructuring as they build out capacity for customers like OpenAI.
Oracle Considers Major Cuts to Fund AI Cloud Push with Openai
Oracle is reportedly considering significant workforce reductions to fund its aggressive expansion into AI infrastructure. As the company takes on massive debt to support contracts with OpenAI and Nvidia, it faces pressure to maintain margins. These potential cuts reflect a broader industry trend of reallocating resources from legacy software to AI, creating volatility for technical staff and visa-dependent workers in the global job market.
