Oracle’s global workforce has shrunk by 21,000 people over the past year, a drop of nearly 13%, while the company raised its capital spending by 162% to $55.7 billion.
This now puts Oracle’s headcount at 141,000 full-time employees as of May 31, down from 162,000 a year earlier. Oracle said the cuts stem in part from its AI rollout, stating that adoption of the technology across its operations “may continue to result in reductions to our workforce.” Restructuring costs tied to the cuts reached $1.8 billion for the year, up sharply from $374 million the year before, covering severance and other exit payments.
Where the Capital is Going
Oracle’s capital expenditure climbed to $55.7 billion in fiscal 2026 from $21.2 billion the prior year, funding new AI data centers built to meet customer demand, while cash flow fell to negative $23.7 billion over the same period.
Chief financial officer Hilary Maxson told analysts that net capital expenditure for fiscal 2027 is targeted at roughly $70 billion, Quartz reported. The AI buildout is tied to a backlog of $553 billion in remaining performance obligations, which includes a five year, $300 billion compute agreement with OpenAI.
Oracle raised $50 billion in debt and equity in January to help finance the expansion. TD Cowen analysts estimated the workforce cuts could free up $8 billion to $10 billion in annual cash flow, funds the company needs as it borrows to build data centers faster than rivals with more money. Unlike Amazon and Microsoft, who fund AI buildouts largely from existing cash flow, Oracle is financing much of its expansion through new debt.
Part of a Wider Pattern
Oracle is not alone in this AI-sponsored layoffs. Meta cut 8,000 jobs, about 10% of its staff, in the same stretch while expanding its AI budget. Microsoft also offered voluntary buyouts to 7% of its U.S. employees in April.
Across the technology sector, AI was cited as the leading reason for job cuts for a third straight month in May, according to Challenger, Gray & Christmas, which recorded 38,579 AI linked cuts that month alone.
What comes next
Oracle’s stock fell about 1% following its SEC filing and remains down more than 10% for the year. The company has said further workforce reductions remain possible as AI deployment continues across its operations, which points to more capital committed to the infrastructure Oracle is betting will replace its employees.
