Oracle is preparing massive employee layoffs. Money is needed for data centers for AI

Oracle, the owner of cloud services and data centers for AI, plans to cut thousands of employees in various departments, Bloomberg reports citing sources. The company needs to optimize spending against the background of a sharp increase in spending on infrastructure for AI. This spending has already forced it to significantly increase its debt load. Investors liked the new way - the shares rose in price amid a general sell-off in the market.

Cloud services provider Oracle is preparing large-scale staff cuts around the world as the company ramps up investments in building AI data centers and faces pressure on cash flow, Bloomberg wrote. According to its sources, the layoffs will take place in various divisions and will begin in the coming weeks. Some of the layoffs will affect those categories of employees, the need for which, according to Oracle estimates, will decrease due to the introduction of AI.

This week, the company also began reviewing open positions in its cloud business, effectively slowing or halting hiring. However, plans to cut staff are still under discussion and could change, the agency adds.

Oracle declined to respond to Bloomberg's request for comment.

As of the end of May 2025, the company had about 162,000 employees worldwide, according to its Form 10-K.

The company has long been known for database software, but it has been undergoing a transformation in recent years, building up an AI-focused cloud computing division and aiming to become a full-fledged competitor to market leaders Amazon and Microsoft, Bloombergnotes. Oracle is now actively building data centers that will provide AI capacity for customers such as OpenAI, for example.

To deploy this capacity, the company has sharply increased its debt load, issuing one series of bonds after another. At the same time, its capital spending is growing, and its cash flow in the last reported quarter was weaker than expected. Wall Street analysts predict that Oracle's cloud division's spending on building data centers could lead to negative cash flow for the company in the coming years before the investment begins to pay off closer to 2030, Bloomberg reports.

Oracle also said last month that it plans to raise about $50 billion more this year through a combination of debt and a stock offering.

In September 2025, the company announced the largest restructuring program in its history, worth up to $1.6 billion - it is scheduled for the current fiscal year, which ends in May, the agency recalls.

Oracle's first steps as a provider of cloud solutions for artificial intelligence attracted the attention of investors, who raised the share price by 61% in 2024 and by 20% in 2025, recalls Bloomberg. As the debt load increased, market interest waned. Since the beginning of this year, the company has lost 20% of its value.

At the end of trading on March 5, quotations grew by 1.6%, while the broad market experienced a sharp sell-offdue to the ongoing conflict in the Middle East. Oracle securities continued to rise in price in the postmarket.

Wall Street is not losing optimism about the company's prospects: 35 analysts out of 45 advise buying its shares, according to Marketwatch. A month ago, there were only 32 such recommendations. Nine analysts take a neutral position, and one suggests selling Oracle securities. A month earlier, the provider had two bearish ratings.

The average target price is $271, suggesting a potential upside of 75% relative to the March 5 close of trading.

This article was AI-translated and verified by a human editor