Oracle announced layoffs of thousands of employees after heavily investing in AI, leading to a stock price drop and soaring debt.

Oracle announced layoffs of thousands of employees after its stock price plummeted more than 25% this year, following the company's massive investment in AI infrastructure and increased debt.

On April 1, 2026, at 5:20 AM, CNBC reported that Oracle has begun notifying employees of plans to cut thousands of jobs amid pressure from a sharply declining stock price, primarily due to large investments in artificial intelligence (AI) infrastructure.

While Oracle's core business continues to face concerns from competition in generative AI technology, the company also faces pressure from investors regarding increasing debt levels from AI investments and declining cash flow.

A report from Business Insider first revealed the layoffs, while CNBC confirmed the information from two sources close to the matter. Oracle, which has approximately 162,000 employees as of May 2025, declined to comment.

This year, Oracle's stock price has fallen by approximately 25%, which is more than any other major technology company in the market.

Oracle remains primarily focused on enterprise databases, but in recent years, the company has increased its investment in cloud infrastructure and data centers to support AI demands, much like major competitors such as Amazon. However, Oracle remains smaller than its competitors in the cloud market.

The company has turned to debt financing to support these investments. In January, Oracle announced plans to raise $50,000 billion through both debt and equity, although executives stated there were no plans to take on new debt in 2026.

Previously, Oracle revealed that "Remaining Performance Obligations" revenue surged 359% to $455,000 billion after reaching a $300,000 billion agreement with OpenAI. Following this, a management restructuring took place, with Mike Sicilia and Clay Magouyrk replacing Safra Catz as CEOs.

Analysts from TD Cowen estimate that if Oracle were to lay off around 20,000–30,000 employees, it could increase its free cash flow by approximately $8,000–10,000 billion.

However, Oracle executives remain confident that investments in AI will yield long-term returns, stating that the demand for AI infrastructure, including GPUs and CPUs, continues to exceed the supply, reflected in the steadily increasing backlog of orders.

Reference: www.cnbc.com

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