 "Oracle layoffs: Company plans up to 30,000 job cuts amid AI funding crunch")
Oracle is reportedly preparing to cut between 20,000 and 30,000 jobs and could even sell its healthcare software unit, Cerner, as rising borrowing costs and a funding crunch threaten its massive AI data-centre expansion.
According to a CIO report citing investment bank TD Cowen, the potential layoffs, among the largest in Oracle’s history, could free up $8 billion to $10 billion in cash, money the company “urgently needs right now.”
The investment bank said Oracle is under mounting pressure as US lenders withdraw from financing its AI infrastructure projects, forcing the company to consider drastic cost-cutting measures.
Oracle has not commented publicly on the report, but the timing is critical. The company is locked in a high-stakes battle for cloud and AI dominance with Amazon, Microsoft, and Google, a race that requires billions in fresh infrastructure spending.
US banks back away from Oracle’s AI data-centre projects
TD Cowen estimates Oracle’s infrastructure commitments now require around $156 billion in capital spending, a figure that has alarmed both equity and debt investors. Several US banks, once eager to fund Oracle’s rapid data-centre rollout, have reportedly stepped back.
As a result, the cost of borrowing has shot up. Lenders have nearly doubled the interest rate premiums they charge Oracle since September, the report said, adding that this surge has already stalled several key projects.
“Multiple Oracle data-centre leases under negotiation with private operators struggled to secure financing,” TD Cowen noted. Without external funding, Oracle cannot secure the computing capacity it needs, a serious setback in its bid to compete in the AI infrastructure market.
Cerner sale and ‘bring your own chip’ strategy under review
To ease the financial pressure, Oracle is also exploring strategic options, including a possible sale of Cerner, the healthcare software company it bought for $28.3 billion in 2022.
Such a divestment would represent a major pivot for Oracle, which had positioned Cerner as a core part of its healthcare cloud strategy.
The company is also testing unconventional financing approaches.
Quick Reads
View AllAccording to CIO, Oracle has begun asking clients to contribute directly to infrastructure projects, effectively asking customers to help fund new data centres. It is also considering a “bring your own chip” (BYOC) arrangement, in which new clients would supply their own hardware, shifting capital costs off Oracle’s books.
Despite the turbulence, Oracle reportedly aims to raise between $45 billion and $50 billion in 2026 to build more cloud capacity. But with lenders retreating and costs rising, the company may need to rethink how it powers its AI future, or risk being outpaced by rivals with deeper pockets and cheaper credit.
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