Mumbai, February 2: Oracle is reportedly considering its largest-ever workforce reduction, with plans to lay off between 20,000 and 30,000 employees. The potential cuts come as the technology giant faces a severe financial crunch driven by a CNY 2.12 trillion (USD 300 billion) commitment to provide artificial intelligence infrastructure for Sam Altman’s OpenAI.

According to a report from investment bank TD Cowen, the layoffs are intended to free up an estimated CNY 56.6 billion to CNY 70.8 billion (USD 8 billion to USD 10 billion) in cash flow. This capital is desperately needed to bankroll a sprawling network of AI data centres across the United States, which have become significantly more expensive to maintain and build than initially projected. Layoffs in 2026: Amazon, UPS, Dow and Other Global Tech Giants Axe Thousands of Jobs Amid Rising Costs and AI Restructuring.

Oracle AI Infrastructure Costs and Debt Burdens

The financial strain on Oracle has intensified following a rapid accumulation of debt to support its AI ambitions. The company has reportedly spent CNY 410.6 billion (USD 58 billion) in just two months to fund data centre projects in Texas, Wisconsin, and New Mexico. This spending spree has pushed Oracle's total debt beyond CNY 708 billion (USD 100 billion).

Despite the massive investment, Oracle’s market valuation has suffered significantly. Since September 2025, the company's stock has lost more than half of its value, representing a market capitalisation wipeout of approximately CNY 3.28 trillion (USD 463 billion). Analysts suggest the OpenAI deal is "eating Oracle alive financially," requiring roughly 3 million GPUs to meet service commitments.

Oracle Layoffs: Banking Sector Retreat and Strategic Shifts

The financing crisis has extended to the banking sector, where several US lenders have reportedly pulled back from Oracle-linked projects. Borrowing costs for the company have surged, with interest rate premiums doubling since September. This has led to the stalling of multiple data centre leases as private operators struggle to secure the necessary funding for construction. Tech Layoffs 2026: Amazon, Meta, TCS, Pinterest and Others Reduce Workforce by Laying Off Thousands of Employees in January.

To mitigate these challenges, Oracle has begun requiring new customers to pay up to 40 per cent of contract values upfront to help co-fund infrastructure. The company is also reportedly considering the sale of Cerner, its healthcare software unit acquired for CNY 200.3 billion (USD 28.3 billion) in 2022. As Oracle struggles with capacity, OpenAI has already begun shifting some near-term requirements to competitors Microsoft and Amazon.

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(The above story first appeared on LatestLY on Feb 02, 2026 10:49 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).