AI burning too much money is dragging down cash flow. Oracle Corporation(ORCL.US) has been reported planning to lay off thousands of employees to ease financial pressure.

Oracle Corporation (ORCL.US) is planning to lay off thousands of employees, as one of the measures to address the cash flow crunch caused by the large-scale expansion of AI data centers. According to sources familiar with the matter, the layoffs will affect multiple departments of the company and could take place as early as this month. Some positions are being cut because Oracle Corporation expects a decrease in demand related to AI technology becoming more widespread. Under the leadership of founder and chairman Larry Ellison, Oracle Corporation is advancing the largest data center construction project in history to provide AI computational power support to clients such as OpenAI. This company, long known for its database software, has been accelerating its transformation in recent years, aggressively expanding its cloud computing business and focusing on the AI field, intending to compete head-on with cloud business giants like Amazon.com, Inc. (AMZN.US) and Microsoft Corporation (MSFT.US). Compilation data shows that Wall Street predicts that Oracle Corporation's massive investment in cloud business data centers will turn its cash flow negative in the next few years, with returns not expected until related expenses begin to pay off around 2030. Last month, Oracle Corporation announced plans to finance up to $50 billion this year through issuing bonds and stock offerings. Sources say that the scope of layoffs in this plan will far exceed the company's usual gradual layoffs. There have also been reports that Oracle Corporation has internally announced this week that it will reevaluate the large number of cloud business positions being recruited, effectively slowing down or temporarily pausing the hiring process. Oracle Corporation has not commented on this. As of the end of May 2025, Oracle Corporation had approximately 162,000 employees worldwide. The details of the layoff plan are still being formulated, and there may be changes. As an early player in AI cloud services, Oracle Corporation's initial layout was highly sought after by investors, with its stock price rising by 61% in 2024 and another 20% in 2025. But as costs continued to rise, market sentiment turned pessimistic: as of the close on Thursday, the stock had plummeted 55% from its high in September 2025. The high initial investment in AI business has sparked a wave of layoffs throughout the technology industry, with companies balancing budgets through workforce reductions. Microsoft Corporation (MSFT.US) laid off about 15,000 employees last year due to the surge in data center and AI software development investments, and payment company Block (XYZ.US) also announced last week that it was laying off nearly half of its staff, with co-founder Jack Dorsey attributing this to the efficiency improvement brought by AI. In September last year, Oracle Corporation disclosed in documents that it is planning its largest restructuring ever, with costs potentially reaching $1.6 billion by the end of this fiscal year in May, including severance payments for laid-off employees, a scale far exceeding any previous restructuring plan. Oracle Corporation is scheduled to release its third-quarter fiscal 2026 earnings next Tuesday Eastern Time.