Tech major Oracle Corporation is planning to cut between 20,000 and 30,000 jobs and divest select business units as financing pressures grow around its large-scale AI data centre expansion, according to a new analyst report, signaling strains in the capital-heavy race to build AI infrastructure.
A report by TD Cowen, cited by CIO, said both debt and equity investors have raised concerns about Oracle’s ability to fund its planned AI-driven data centre buildout, estimated at roughly $156 billion in capital expenditure tied in part to commitments supporting large AI workloads, including projects linked to OpenAI.
According to the report, several US banks have recently pulled back from lending tied to Oracle’s AI data centre expansion, complicating efforts to secure leases and capacity from private data centre operators. Financing challenges around those leases have in turn slowed Oracle’s ability to lock in new facilities.
Oracle has not publicly confirmed the reported job cuts.
If implemented at the upper end, the layoffs would represent one of the largest workforce reductions in Oracle’s history. The company had already reduced headcount by roughly 10,000 roles in late 2025 under a $1.6 billion restructuring plan.
Analysts estimate the new round of cuts could free up $8 billion to $10 billion in cash flow, helping redirect resources toward infrastructure investment.
AI infrastructure race turns capital intensive
The reported move underscores a broader shift in the AI sector: while demand for AI compute and cloud capacity is surging, the cost of building and financing hyperscale data centre infrastructure is rising even faster.
Unlike traditional enterprise software, AI cloud infrastructure requires massive upfront spending on land, power, cooling, specialized chips and high-density facilities. Vendors are increasingly relying on a mix of debt, partnerships and customer pre-commitments to fund expansion.
TD Cowen’s analysis suggests Oracle is exploring alternative funding and risk-sharing models, including requiring some customers to co-invest in infrastructure and adopt a “bring your own chip” approach, where clients supply their own hardware. Such models reduce vendor balance-sheet exposure but can also narrow the potential customer base.
Portfolio reshaping under consideration
Alongside job cuts, Oracle is also reportedly considering asset sales, including a potential divestment of parts of its healthcare software business Cerner, which it acquired for $28.3 billion in 2022. A sale or partial spin-off would help raise capital and reduce leverage as infrastructure spending accelerates.
The company has said it expects to raise $45 billion to $50 billion in 2026 to build additional cloud and AI capacity, highlighting the scale of its near-term funding needs.
Sector-wide restructuring signals
Oracle would not be alone in restructuring around AI. Several large technology firms have announced workforce reductions tied to AI pivots and cost reallocation, as spending shifts from legacy business lines toward compute infrastructure, AI models and data platforms.
The divergence is becoming more visible: while AI demand is booming, financing conditions — including tighter credit markets and more cautious bank lending — are forcing companies to prioritize capital efficiency and rebalance portfolios.
For Oracle, long known primarily as an enterprise software and database vendor, the push into AI-scale cloud infrastructure marks a strategic transformation — but one that is proving expensive and increasingly dependent on external capital and partner support.
