Oracle considers 30,000 layoffs to fund AI data centre

Oracle is considering cutting between 20,000 and 30,000 jobs and selling some business units as U.S. banks pull back from financing the company’s AI data-centre expansion, according to a research note by investment bank TD Cowen cited by CIO.

The potential job cuts could free up between $8 billion and $10 billion in cash flow. The company is also weighing a possible sale of its healthcare software unit, Cerner, which Oracle acquired for $28.3 billion in 2022.

The moves come as several U.S. banks have reduced or withdrawn lending tied to Oracle-linked data-centre projects. In the report, the bank noted that “both equity and debt investors have raised questions regarding Oracle’s ability to finance this buildout.”

The bank estimated Oracle’s required capital expenditure for infrastructure at about $156 billion, a scale that has raised concerns among lenders. As a result, borrowing costs have risen sharply. Lenders have roughly doubled the interest rate premiums charged to Oracle for data-centre financing since September, pushing borrowing costs to levels more typical of non-investment-grade borrowers.

Higher financing costs have already stalled projects. The bank stated, “multiple Oracle data-centre leases that were under negotiation with private operators struggled to secure financing,” which in turn prevented Oracle from securing capacity through leases. Without financing, private operators are unable to build the facilities Oracle needs, creating delays in the company’s infrastructure rollout.

Oracle has raised significant debt in recent months, issuing about $58 billion over two months. That included $38 billion for facilities in Texas and Wisconsin and $20 billion for New Mexico. The amount represents only a portion of Oracle’s long-term funding needs, while U.S. banks have grown increasingly reluctant to extend further credit.

Asian banks, meanwhile, have remained willing to lend at higher rates as they seek exposure to AI infrastructure growth, according to the report. This offers Oracle some flexibility for international expansion but does not resolve constraints on U.S. data-centre capacity. The firm added that the financing issues raise questions about Oracle’s ability to grow revenue if it cannot deliver the infrastructure customers expect.

To manage capital pressures, Oracle has begun requiring upfront deposits of about 40% from new customers, effectively asking customers to help fund data-centre construction. The company is also exploring “bring your own chip” arrangements, in which customers supply their own hardware.

Workforce reductions and greater use of customer-supplied hardware appear to be the most likely options to ease capital strain. However, the bank noted that both approaches carry risks, including potential contract renegotiations and operational challenges from large-scale layoffs.

If implemented, the cuts would be Oracle’s largest in recent years. The company reduced its workforce by an estimated 10,000 jobs in late 2025 as part of a $1.6 billion restructuring plan. Oracle has also carried out multiple rounds of layoffs at Cerner since acquiring the business, including reductions in 2023 following issues with a U.S. Veterans Affairs contract.

Financing pressures have also affected Oracle’s customer relationships. OpenAI has shifted near-term capacity needs to Microsoft and Amazon, a change from earlier plans under which Oracle leased about 5.2 gigawatts of U.S. data-centre capacity across several states for OpenAI workloads.

More broadly, Oracle’s data-centre procurement has slowed significantly.