Oracle lays off employees to fund AI investments
The company plans a new wave of layoffs in August.
1Oracle's new layoff plans
Oracle is planning a new wave of layoffs in August. Some teams are expected to face double-digit percentage cuts. Managers have been asked to identify affected employees. The company aims to complete these cuts by September 1, the start of the fiscal second quarter. Oracle declined to comment on the matter.
2The cost of AI investments
Oracle eliminated approximately 21,000 jobs in the last fiscal year, representing a 13% drop in headcount. The company recorded $1.8 billion in restructuring costs during this period, with expectations of this figure rising to $2.1 billion before accounting is complete. The layoffs were justified by 'the adoption and deployment of AI technologies.'
3Major borrowing move
Oracle made $55.7 billion in capital expenditures in fiscal year 2026, a significant increase from the previous year. These expenditures were used to build data centers supporting the company's cloud ambitions. To finance these investments, the company borrowed approximately $43 billion and plans to borrow an additional $40 billion.
4Investor reaction
Oracle's shares have lost 26% of their value this year. This is seen as a harsh judgment on the company's strategy of trading steady profitability for a bet on future AI demand. The market is skeptical about whether the returns will justify the borrowing and remains unimpressed for now.
5Industry-wide trend
Oracle is not the only company cutting human costs for AI. Across the sector, firms are viewing salaries as costs to be redirected toward silicon and server halls, converting them into AI capital expenditures. What sets Oracle apart is how starkly the numbers lay this choice bare.
6AI-capex squeeze
Oracle is cutting human costs to fund machines, taking on massive debt to do so, and watching its valuation slide while waiting for the bet to pay off. This is a clear example of the AI-capex squeeze now affecting much of the industry. The company is vulnerable if AI demand arrives more slowly than promised.
7Cold reality for employees
For the thousands affected by this month's cuts, the macroeconomic framework offers cold comfort. These are real jobs in real teams being eliminated to meet a deadline set by the calendar and balance sheet. Even if the AI gamble eventually justifies Oracle's spending, those paying the price now won't be around to see it.
8Implications for the industry
Oracle's situation clearly illustrates the pressure AI investments are putting on companies. Massive borrowing, layoffs, and investor distrust serve as a warning to other players in the sector. The speed at which AI's promises materialize will be the critical factor determining the success of these strategies.
Original article: The Next Web — Oracle, AI yatırımları için çalışanlarını işten çıkarıyor