Oracle Cuts Jobs to Support Its Ambitious AI Project

Oracle has recently made the radical decision to lay off thousands of employees to support its massive investments in artificial intelligence (AI) infrastructure. This information, initially reported by Business Insider and confirmed by CNBC, is part of a strategy aimed at reallocating the company's financial resources. Oracle, which had 162,000 employees in May 2025, declined to comment on these layoffs.

The job cuts are a direct consequence of Oracle's aggressive spending in the AI sector, which has led the company to incur debt as its cash flow decreases. Since announcing in January its intention to raise $50 billion, Oracle's stock value has dropped by about 25%. According to analysts at TD Cowen, laying off 20,000 to 30,000 positions could allow Oracle to free up to $10 billion in cash flow.

During a recent earnings conference, Oracle's co-CEO, Clay Magouyrk, justified these expenditures by highlighting that the demand for AI hardware currently exceeds the available supply. He mentioned that the company has $553 billion in guaranteed revenue, including a substantial order of $455 billion from OpenAI. However, doubts remain about OpenAI's ability to fulfill this order, given that the creator of ChatGPT is also burning through its cash at an alarming rate.

An internal email from Oracle regarding the layoffs only mentions "current business needs" without providing specific details. This situation is not isolated, as Meta is also planning large-scale layoffs to offset its own massive costs related to AI infrastructure.