Oracle plans thousands of job cuts amid rising costs of AI data centers, report says

Oracle again plans for major job cuts in 2026 to mitigate rising AI data center costs.

Enterprise software company Oracle is planning thousands of job cuts as it faces a cash crunch from a massive AI data center expansion effort, Bloomberg News reported on Thursday.

Long a ‌smaller contender in the cloud market, over the past year Oracle has emerged as a major player in the business of renting computing power thanks, in part, to its $300 billion deal with OpenAI.

But investors have grown worried about how it would fund the data center expansion needed to serve OpenAI and other customers, including Elon Musk's xAI and Meta.

In December, the company said it expects capital expenditures for fiscal 2026 to be $15 billion higher than the $35 billion figure the company estimated during its first-quarter earnings call.

The layoffs will impact divisions across Oracle and may be implemented as soon as this month, the Bloomberg report said, citing people familiar with the matter. Some cuts will be aimed at job categories that the company expects will shrink due to AI.

The planned reductions are expected to be ‌wider-reaching than Oracle's typical rolling job cuts, according to Bloomberg.

This week, Oracle announced internally that it would be reviewing many of the open job listings in its cloud division, effectively slowing down or freezing the hiring process, the report added.

The company had about 162,000 full-time employees as of May 31, 2025, according to its annual filing with the U.S. Securities and Exchange Commission.

The software company, chaired by billionaire Larry Ellison, in February outlined plans to raise $45 billion to $50 billion this year in order to expand its cloud infrastructure, fueling investor concerns about its rising debt load.

Oracle will report third-quarter results on Tuesday. Its shares fell more than 15% last year, with its December results showing about $10 billion in cash burn for the first half of the fiscal year.

Previously, Oracle ordered more than 10,000 major layoffs in 2025.