- Oracle cut 21,000 jobs, 13% of its workforce, in fiscal 2026.
- Company plans $70 billion AI infrastructure spending, raising $40 billion.
- Major AI contracts, including OpenAI, drive strategic business realignment.
Oracle has reduced its workforce by nearly 21,000 employees during fiscal 2026, even as the technology giant doubles down on artificial intelligence and prepares for one of the largest spending programmes in its history.
The workforce reduction comes at a time when Oracle is reporting strong business momentum, signing large AI-related contracts and planning billions of dollars in fresh investments to expand its cloud and data centre infrastructure.
Workforce Shrinks
According to Oracle’s annual report released on Monday, the company employed 141,000 people as of May 31, 2026, down from around 162,000 a year earlier. The decline represents a workforce reduction of roughly 13 per cent, or nearly 21,000 employees, reported Financial Express.
The job cuts form part of a broader restructuring effort as Oracle realigns its business to focus on emerging growth areas, particularly artificial intelligence and cloud computing.
The development comes amid a wider wave of layoffs across the technology sector. According to Layoffs.fyi, which tracks workforce reductions in the industry, 196 technology companies have cut more than 119,800 jobs so far this year.
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AI Expansion Drives Strategic Shift
While Oracle has trimmed its workforce, it is simultaneously ramping up investments in areas it sees as critical to future growth.
The company spent $1.84 billion on severance payments and restructuring-related expenses during fiscal 2026, a sharp increase from the $374 million spent on similar activities in the previous fiscal year.
In its annual filing, Oracle said the workforce changes stemmed from several factors, including management changes, product-related decisions, employee performance considerations, strategic priorities and acquisitions.
The restructuring coincides with the company’s push to strengthen its position in the rapidly expanding AI infrastructure market.
A $70 Billion AI Spending Plan
Earlier this month, Oracle revealed plans for net capital expenditure of approximately $70 billion in the current fiscal year as it expands the infrastructure needed to meet growing demand for AI services.
To support that spending, the company intends to raise an additional $40 billion through a combination of debt and equity financing. This amount includes a previously announced stock offering valued at $20 billion.
The scale of Oracle’s AI ambitions is reflected in its order book. The company has secured a pipeline of future contracts whose value now exceeds Oracle’s entire market capitalisation.
A substantial portion of these agreements is linked to OpenAI, positioning Oracle as one of the major beneficiaries of the global race to build AI infrastructure and data centres.
AI Contracts Become the New Growth Engine
Oracle’s strategy increasingly revolves around converting long-term AI commitments into sustained revenue growth.
The company has secured large multi-year contracts that are expected to support business expansion for years to come. Beyond AI infrastructure, Oracle has also strengthened its presence across sectors including healthcare, hospitality and the public sector.
The growing demand for cloud services and AI computing capacity has created fresh opportunities for technology companies capable of building and operating large-scale infrastructure.
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Investors Face a Mixed Picture
Despite optimism around AI, Oracle’s stock has experienced a turbulent period in recent months.
Shares closed at $175.07, but the stock has fallen 9.1 per cent over the past week, declined 8.9 per cent over the last month and dropped 10.5 per cent since the beginning of the year.
However, the longer-term performance remains considerably stronger. Oracle shares have gained 55.3 per cent over the past three years and surged 138.6 per cent over the last five years.
The contrast highlights the market’s mixed reaction to Oracle’s aggressive spending plans and restructuring efforts.
Oracle’s transformation reflects a broader shift underway across the technology industry, where companies are increasingly redirecting resources towards AI-related businesses.
However, the strategy comes with significant execution risks.
The combination of large-scale layoffs, negative free cash flow and plans to raise billions of dollars from investors places added pressure on management to deliver growth.
