Oracle may cut 30,000 jobs to bankroll AI infrastructure

Oracle is facing increasing scrutiny from investors over how it plans to finance its AI infrastructure build-out, with reports that the cloud provider might consider mass layoffs as cost-cutting measures to support its data centre ambitions. One of the options on the table for the Larry Ellison-led company is a headcount reduction of between 20,000 and 30,000. It is further estimated that Oracle might sell off assets such as health tech platform Cerner that was acquired by the company for $28.3 billion in 2022.

While Oracle has not confirmed of conducting layoffs, it would not be the first tech giant to slash jobs in response to the mounting pressure to invest in AI.

Earlier, big US firms such as Amazon, UPS, and Dow have announced an estimated total of 52,000 job cuts with experts noting that companies “appear eager to use artificial intelligence to reduce labour costs,” according to a recent report by Financial Times.

Oracle’s debt has continued to climb in the past few months, even as its fortunes become increasingly ⁠tied to OpenAI, ⁠which is not profitable and has not detailed how it would finance its infrastructure plans. Last month, Oracle was sued by bondholders who said they suffered ‍losses because the company concealed its need to sell significant additional debt to build out its AI infrastructure.

On Sunday, February 1, Oracle said it is looking to raise $45 billion to $50 billion in 2026 using a combination of debt and equity financing.

“Oracle is raising money in order to ‌build additional capacity to meet the contracted demand from our largest Oracle Cloud Infrastructure customers, including AMD, Meta, NVIDIA, OpenAI, TikTok, xAI and others”, the company was quoted as saying by Reuters.