Oracle plans more job cuts as AI bill rises

AI boom comes at a cost

Oracle is preparing another round of job cuts as the technology giant seeks to reduce costs while spending billions of dollars on infrastructure to meet soaring demand for AI.

An internal document seen by Business Insider says some teams could see double-digit percentage reductions in their workforce.

Managers have reportedly been asked to identify employees whose jobs could be cut, with the aim of reducing payroll by the start of Oracle's second quarter on 1st September.

The company has not confirmed the scale or timing of the potential cuts.

The latest plans follow significant reductions earlier this year. Oracle's workforce fell by about 21,000 people, or 13%, during its financial year ending on 31st May, according to a recent company filing.

The company currently employs about 141,000 people.

In its filing, Oracle said the deployment of AI technologies across its operations had already resulted in reductions to its workforce and could lead to further cuts.

It also warned that restructuring could be disruptive, including by creating shortages of skilled workers in some areas and reducing productivity.

"As our cloud and AI businesses grow, we will continually balance our resources and restructure our development group to help ensure we have the right people delivering the best cloud and AI products to our customers around the world," the company told the BBC.

AI boom comes at a cost

Oracle is investing heavily to expand its cloud infrastructure as demand for computing power used to develop and run AI systems surges.

Its capital spending reached about $55.7 billion in the 2026 financial year, up sharply from $21.2 billion a year earlier, as it accelerated construction of datacentres and purchases of equipment.

The scale of that investment has increased pressure on the company's finances.

Oracle recorded an operating cash shortfall of about $23.7 billion during the year and raised roughly $43 billion through debt. It is also expected to raise a further $40 billion, alongside about $5 billion in equity.

The company has therefore been relying heavily on borrowing to fund its AI infrastructure expansion, leaving it more exposed if demand for AI computing grows more slowly than expected.

In July, credit ratings agency S&P Global Ratings cut Oracle's long-term credit rating to BBB-, one level above junk status, citing rising debt and sharply negative cash flow.

Despite the financial pressure, Oracle's latest results showed strong demand. Revenue increased by 17% in its latest financial year, while its cloud infrastructure business grew by 77%.

The company's chairman, Larry Ellison, has previously played down concerns that AI could undermine established software firms, saying the so-called "SaaSpocalypse" would be a problem for other companies rather than Oracle.

Wider tech industry cuts

Oracle's proposed cuts show the financial pressures facing tech companies investing heavily in the AI boom.

Google, Amazon and Meta are collectively expected to spend about $650 billion on the technology this year, with much of that investment going towards datacentres, chips and other infrastructure.

Amazon has said it plans to spend $200 billion on AI investments over the next year. At the same time, the company is preparing to cut about 30,000 jobs in several rounds of layoffs.

A senior Amazon executive said last year that the company needed to become "more leanly" organised because AI was allowing businesses to innovate more quickly.