Oracle considering 30,000 layoffs to bankroll massive AI infrastructure build-out
- Marijan Hassan - Tech Journalist
- 2 hours ago
- 2 min read
Investment Bank TD Cowen warns of "extreme" capital pressure as U.S. lenders pull back from $156 billion OpenAI project.
Oracle is reportedly considering a workforce reduction of up to 30,000 employees, roughly 18% of its global staff, to offset the staggering costs of its ambitious AI data center expansion. According to a bombshell research note from TD Cowen released on January 30, 2026, "Big Red" is facing a critical financing crunch as it attempts to fund a $300 billion, five-year agreement to supply computing power to OpenAI.
The potential cuts would be the largest in Oracle's 48-year history, aimed at freeing up between $8 billion and $10 billion in annual cash flow to keep its AI infrastructure projects on track.
The $156 billion "Stargate" bottleneck
While Oracle’s backlog of orders has exploded to over $500 billion, the upfront cost of building the physical "shells" and filling them with millions of GPUs is proving more expensive than investors anticipated.
TD Cowen estimates that the OpenAI contract alone requires $156 billion in capital expenditure and the deployment of roughly 3 million high-end GPUs.
Banking retreat
Multiple U.S. banks have reportedly pulled back from financing Oracle-linked data center projects, citing the high debt load and "concentrated risk."
Moreover, lenders have nearly doubled the interest rate premiums they charge Oracle since late 2025, pushing borrowing costs toward territory usually reserved for much riskier "junk-rated" companies.
"Everything is for sale": The Cerner divestiture
To navigate the liquidity crisis, Oracle is moving beyond simple layoffs. The company is reportedly exploring a "fire sale" of Cerner, the healthcare technology giant it acquired for $28.3 billion in 2022.
Analysts suggest that selling Cerner would signal a total strategic pivot, where Oracle abandons its dream of being a "healthcare-first" company to focus entirely on becoming the world’s primary AI utility. Additionally, the company has begun asking new customers for 40% upfront deposits on cloud contracts, essentially asking clients to co-fund the data centers they plan to use.
The "Empty Shell" risk
The financing struggle has already led to construction delays. Reports indicate that several planned data center leases in Texas and Wisconsin have stalled because private developers cannot secure the funding needed to build the facilities for Oracle.
If these delays persist, OpenAI and other major clients may be forced to shift their workloads to Microsoft or Amazon, potentially leaving Oracle with massive debt and unfinished campuses. "CIOs need to treat Oracle's cloud build-out not as a service agreement, but as a shared infrastructure risk," warned one lead analyst. "If they can't fund it, they can't build it."
Oracle's response
While Oracle has not publicly commented on the 30,000-job cut figure, it has recently emphasized its commitment to "on-site power generation" and "closed-loop cooling" to lower long-term operating costs. In a recent blog post, the company noted that its new sites will eventually employ "thousands of people" once operational. However, this provides little comfort to the tens of thousands currently facing the chopping block in corporate and engineering roles.
