The cloud and software giant Oracle is supposedly considering a major job cut of 20,000 to 30,000 jobs. The move will help unlock between $8 billion and $10 billion of free cash flow to support the company’s massive turnaround on AI-powered infrastructure. Conventional American lenders are increasingly wary of the capital demand and hefty debt profile required by hyperscale AI projects, the report states.
The "OpenAI" Factor and Cost Pressure
Central to Oracle’s financial reorganization is its massive bet on Sam Altman’s OpenAI.
- Capital Intensity: TD Cowen estimates Oracle’s infrastructure commitments these commitments especially in terms of OpenAI would be around $156 billion of capital expenditure.
- Rising Debt: Oracle itself took out a $58 billion loan in the first two months alone in 2026 to pay for campuses in Texas, Wisconsin, and New Mexico, the news reported. The company’s overall debt is now in excess of $100 billion.
Why the Layoffs? Banks Pull Back
The layoffs laid off now are not only cost-cutting; they’re in response to the credit market tightening. Major banks in the US are reported to have cut back lending to Oracle-linked data center projects, raising fears about the company’s ability to meet rising demand for its loans. That has caused:
- Rising Interest Rates: After late 2025, the technology behemoth is said to have doubled borrowing costs.
- Stalled Leases: Talks with private data center operators have reached bottlenecks as financing for new construction dries up.
Asset Sales & Strategic Shifts:
1. In addition to laying off workers, Oracle is trying to discover how it can strengthen its balance sheet:
- Sale of Cerner: Oracle is rumored to sell Cerner, the healthcare software business it bought for $28.3 billion in 2022.
- “Bring Your Own Chip” (BYOC): Oracle is exploring a new business model where customers contribute their own hardware (GPUs), pulling the capital risk from Oracle’s books from the start.
- Upfront deposits: It’s said that prospective customers have been asked to make up to 40 percent deposits in exchange for co-financing their infrastructure.
Industry Impact
Such cuts, if enacted, would reflect a brutal reality of the tech industry: Even for the giants like Oracle, the “AI race” is turning into a costly attrition war. Oracle, of course, has not released anything official about the 30,000 number yet but on Feb. 1, said it expects to raise $45 billion to $50 billion to meet contracted demand from customers like NVIDIA, Meta and xAI.
