Global technology major Oracle is preparing for sweeping cost-cutting measures as it seeks to bankroll an aggressive expansion of its AI data-centre infrastructure. The company is considering laying off 20,000 to 30,000 employees and is also exploring a potential sale of its healthcare software arm Cerner, acquired in 2022 for $28.3 billion (about ₹2.35 lakh crore).
Analysts tracking the company say the moves are aimed at freeing up $8–10 billion (₹66,000–₹83,000 crore) in cash at a time when US banks have pulled back from financing Oracle-linked AI data-centre projects, sharply raising borrowing costs and slowing expansion plans.
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Financing pressure mounts
Investment research firms note that lenders have grown increasingly cautious about the scale and pace of Oracle’s infrastructure commitments. Interest-rate premiums on project financing for Oracle-backed data centres have nearly doubled in recent months, pushing borrowing costs closer to levels typically associated with non-investment-grade borrowers.
As a result, several proposed data-centre lease agreements with private operators have stalled after failing to secure financing. Industry executives say this has created a bottleneck for Oracle, which depends on a mix of owned and leased facilities to scale its cloud and AI services rapidly.
Oracle’s overall infrastructure commitments are estimated at around $156 billion (nearly ₹12.9 lakh crore) in required capital expenditure, placing sustained pressure on cash flows even as demand for AI computing surges.
Why Cerner matters
The possible divestment of Cerner is being closely watched. Analysts say selling the healthcare software unit could provide immediate liquidity, easing near-term funding stress and allowing Oracle to prioritise its AI and cloud roadmap.
However, the move would also mark a strategic retreat from healthcare IT, a sector Oracle had positioned as a long-term growth pillar following the Cerner acquisition. Critics argue that offloading the unit could weaken Oracle’s diversification strategy, while supporters see it as a pragmatic step to support higher-return AI investments.
Big AI bet, tough execution
Oracle is expected to raise $45–50 billion (₹3.7–₹4.1 lakh crore) this year to add capacity to its Oracle Cloud Infrastructure (OCI) platform, betting that enterprise demand for AI-ready cloud services will continue to accelerate.
Company co-founder Larry Ellison has previously indicated that Oracle plans to meet its funding needs through a combination of debt and equity. The company says OCI has secured large contracted demand from marquee customers including AMD, Meta, NVIDIA, OpenAI, TikTok and xAI.
Oracle maintains that expanding capacity is essential to honour existing contracts and remain competitive in the global AI cloud race.
Jobs impact, wider signal to tech
If implemented, the scale of the layoffs would rank among the largest workforce reductions in the global technology sector in recent years. Industry observers say the move underscores a broader shift across Big Tech, where capital discipline is increasingly colliding with AI-driven expansion plans.
Rising interest rates, tighter bank lending norms and the sheer cost of building AI-ready infrastructure are forcing even cash-rich firms to reassess spending priorities and workforce size.
No official confirmation yet
Oracle has not formally announced any layoffs or the sale of Cerner. In statements to clients and partners, the company has said it is evaluating multiple funding options to meet contracted cloud demand while maintaining financial flexibility.
Still, market signals are clear. The race to dominate AI infrastructure is intensifying—and so is the cost of financing it. Oracle’s next steps will be closely watched as a test of how major technology companies balance aggressive AI investment with cost control and workforce stability in a tighter global funding environment.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
