Oracle Plans More Layoffs as AI Expansion Deepens Its Cash Crunch

For tech workers, 2026 has been a bruising year — even at companies reporting record revenue. Salesforce cut its support organization nearly in half earlier this year, then followed with quieter job reductions tied to an AI shakeup in February. The explanation each time sounded familiar: artificial intelligence had made those roles unnecessary.

Oracle is now writing a similar chapter, except its version carries a much larger price tag.

Oracle has drawn up plans for another round of layoffs in August, according to people familiar with the matter and an internal document viewed by Business Insider on Aug. 11. Managers have been asked to submit lists of affected employees, and the company is aiming to trim payroll before its fiscal second quarter opens on Sept. 1. The cuts could reach double-digit percentages on some teams, the document said.

Oracle declined to comment on the plans.

This is not the company's first major reduction. During the fiscal year ended May 31, Oracle eliminated 21,000 roles, roughly 13% of its workforce. Headcount fell to about 141,000, down from 162,000 a year earlier. Severance and other exit-related costs jumped to $1.84 billion for the year, compared with $374 million the prior year, according to the company's annual filing.

Oracle has also acknowledged directly that AI adoption is a factor behind the cuts — language that rarely appears with such clarity in a corporate filing.

The urgency is visible on the other side of the balance sheet. Oracle's revenue grew 17% in fiscal 2026, an unusually fast clip for a company built on decades-old database software. But that growth is not covering the bill for the AI buildout.

Oracle spent $55.7 billion on infrastructure in fiscal 2026, exceeding its cash generation by $23.7 billion. To bridge the gap, the company raised $43 billion in debt and another $5 billion through stock sales during the year. It expects to raise roughly $40 billion more through a mix of debt and equity in the current fiscal year.

That arithmetic explains why staff cuts and capital spending are moving in opposite directions at the same company. Cutting payroll is one of the few levers Oracle can pull fast enough to offset a data-center bill that keeps climbing.

Investors showed a modest response to the layoff report: Oracle shares gained 1.2% in overnight trading. That followed a 52-week low in July. Even after the bounce, the stock is down about 26% this year, a steeper decline than most of its cloud-infrastructure peers.

Some of that skepticism has turned into outright bets against the stock. Investor Michael Burry disclosed a new short position in Oracle, describing the trade as "like shooting fish in a barrel," according to TipRanks. The same week, Burry made a nearly identical bet against Nebius, another AI-infrastructure company burning through cash.

His thesis, as described in the reports, is not that AI demand is fake. It is that companies borrowing heavily today are betting demand stays strong long enough to pay off the debt.

Retail investors have flagged a separate worry: Larry Ellison has pledged 346 million Oracle shares as loan collateral, an overhang that grows more sensitive each time the stock drops, according to a 24/7 WallSt analysis.

Not everyone sees the layoffs as a warning sign. Barclays argued in a note that the cuts amount to cost discipline the market already expects, and it maintained an overweight rating on the stock, CNBC reported.

Oracle's situation captures a pattern spreading across enterprise software. Companies with genuine AI-driven revenue growth — Oracle's cloud infrastructure unit expanded 77% last year — are still cutting staff because growth alone is not paying for the buildout. That combination of rising revenue and shrinking headcount is becoming a template rather than an exception.

Bank of America analyst Vivek Arya points to Oracle's $638 billion cloud backlog as the eventual payoff, with margins expected to bottom out before improving. About 12% of that backlog is due within a year, and another 34% is expected over the next two to three years, according to BofA's estimates.

That timeline gives Oracle a narrow window to convert contracted revenue into cash to keep paying down debt. It also depends on customers such as OpenAI actually paying for the capacity Oracle is building.