The software and cloud company Oracle is preparing another round of layoffs, according to a report by Business Insider, which is intended to finance the billion-dollar investments in AI data centers. The cuts are expected to take effect before the start of the second fiscal quarter on September 1, according to an internal document. Some teams could lose double-digit percentages of their workforce.
Capital expenditures double to $55.7 billion
Oracle has more than doubled its capital expenditures in the completed fiscal year 2026 to $55.7 billion, up from $21.2 billion the previous year. The company spent $23.7 billion more cash than it earned. To close the gap, Oracle took on $43 billion in new debt and $5 billion in fresh equity. For the current fiscal year 2027, the company announced further net investments of around $70 billion in data centers, in addition to customer prepayments of $20 to $25 billion. At the same time, revenue in fiscal year 2026 grew by 17 percent to $67.4 billion, the cloud business increased by 39 percent to $34 billion, and the remaining performance obligations rose to $638 billion. Oracle cites sustained high demand from major customers like OpenAI, Meta, and xAI for computing capacity, which continues to exceed the supply of its own and rented data centers. Just in July, the rating agency S&P Global downgraded Oracle’s credit rating due to the OpenAI contract risk – a sign of how closely investors are now monitoring the financing of AI expansion.
Report cites double-digit cuts in individual teams
The HR department has instructed executives to identify affected employees, Business Insider reports, citing sources familiar with the plans and an internal document. In individual teams, the cuts could reach double-digit percentages. Oracle had already reduced around 21,000 of the previously 162,000 positions in fiscal year 2026, a decrease of about 13 percent to around 141,000 employees worldwide; the company cited increased use of AI technologies in its own operations as one reason. For the already completed reduction, Oracle paid around $1.8 billion in severance and other separation costs, significantly more than the $374 million in the previous year; for ongoing restructuring, the company expects total costs of up to $2.1 billion. Oracle declined to comment on the current report. Already in the spring of 2026, the company had cut jobs in several waves, primarily in the cloud division, which observers now interpret as a pattern of recurring cuts. On the stock market, investors reacted cautiously: the stock had already fallen to a 52-week low and rose slightly in after-hours trading following the announcement of the new plans.
Other tech companies justify job cuts with AI investments
Oracle thus joins a growing list of companies that explicitly justify job cuts in 2026 with AI investments. The Israeli software provider Monday.com cut around 620 jobs in July for the transition to an AI-supported work platform, while Visa cut 320 jobs at its headquarters in Foster City and cited increased AI use as one of the reasons. Analysts view investments in Nvidia chips and the expansion of its own data centers at Oracle as a direct bet on large AI customers like OpenAI and Meta, whose orders make up a large part of the open orders. Unlike Monday.com or Visa, Oracle is not primarily focused on replacing labor with AI software, but rather on reallocating personnel costs towards interest and depreciation for its own data center infrastructure.
It remains unclear how many positions will actually be eliminated and in which areas – Oracle did not comment on this. It will be crucial whether the company officially confirms the cuts with the expected release of the first quarter results for fiscal year 2027 in September and whether this pattern solidifies as a permanent strategy for financing the AI construction boom.
