Oracle cuts thousands of jobs to fund $15B AI data center expansion
Oracle plans to cut thousands of jobs across divisions this month to bankroll a data center build-out for AI cloud contracts with Meta, OpenAI and xAI. The company raised its fiscal 2026 capex outlook by $15B to $50B, slowed cloud hiring, and burned $10B in cash in H1.
1. Job cuts announced
Oracle has initiated plans to eliminate thousands of positions across multiple business units, with reductions potentially starting this month. Some roles identified for cuts include positions the company expects AI to automate, signaling a shift toward a leaner, technology-driven workforce.
2. Capex revision and funding needs
In December, Oracle raised its fiscal 2026 capital expenditure forecast by $15 billion, bringing the total to $50 billion. This increase is aimed at financing the rapid build-out of data centers required to support high-demand AI workloads.
3. Impact on Meta and other clients
The job cuts are directly linked to funding landmark infrastructure deals with Meta, OpenAI and xAI that demand vast computing resources. Ensuring on-time delivery of data center capacity is critical to maintaining service agreements and long-term revenue streams.
4. Workforce automation and hiring freeze
Oracle has also imposed a hiring freeze in its cloud division to curb costs, compounding the impact of layoffs. The combined measures reflect a strategic pivot to control cash burn, which reached $10 billion in the first half of the fiscal year.