Oracle is laying off thousands of employees across divisions worldwide—at least 10,000 gone so far, with analysts at TD Cowen estimating the final number could climb to 20,000 to 30,000. That would be roughly 18% of Oracle’s 162,000-strong global workforce, and the company’s largest restructuring ever. Oracle disclosed in September 2025 that the plan could cost up to $1.6 billion this fiscal year in severance alone—dwarfing every previous restructuring it has undertaken.Oracle hasn’t said much publicly. The layoff email sent to affected employees, signed off simply as “Oracle Leadership,” cited only “careful consideration of Oracle’s current business needs” and a “broader organizational change.” No explanation. No specifics. Just a DocuSign link and a countdown.So what’s actually driving this? The answer has Sam Altman‘s fingerprints all over it.
A $300 billion promise to OpenAI—and the debt spiral it triggered
In July 2025, Oracle and OpenAI formalised what is arguably the largest cloud computing deal in history. OpenAI committed to spending $300 billion on Oracle’s infrastructure over roughly five years, starting in 2027. In exchange, Oracle agreed to build out 4.5 gigawatts of AI data centre capacity across the US—enough electricity to power over four million homes simultaneously—to support ChatGPT’s training and inference workloads.Wall Street loved it. Oracle’s stock surged 43% in a single day when the scale of the deal became clear in September 2025, briefly making Larry Ellison the richest person on Earth. The company’s remaining performance obligations hit $553 billion as of its most recent quarter.The problem: building five of the world’s largest data centre complexes, on an accelerated timeline, requires cash Oracle doesn’t have lying around. Since the deal was formalised, Oracle has taken on $58 billion in new debt in just two months—$38 billion for campuses in Texas and Wisconsin, another $20 billion for a site in New Mexico. Total debt now exceeds $100 billion. Free cash flow has swung to a trailing deficit of nearly $25 billion. Oracle has said it won’t turn cash-flow positive on this bet until around 2030.
The stock has lost half its value—and the OpenAI relationship is already showing cracks
The market’s enthusiasm has curdled fast. Oracle shares have fallen 54% from their September 2025 peak. Several US banks have quietly pulled back from financing Oracle-linked data centre projects, and interest rate premiums on the company’s debt have roughly doubled in that time.Then, in early March 2026, Bloomberg reported that Oracle and OpenAI had scrapped plans to expand their flagship Stargate data centre in Abilene, Texas—a site that was supposed to scale from 1.2 gigawatts to 2.0 gigawatts. The reason: OpenAI wants newer Nvidia chips available at other locations, not the Blackwell processors already ordered for Abilene. Oracle had already secured the site, ordered hardware, and spent billions on construction. Negotiations had been ongoing since mid-2025 but fell apart over financing and OpenAI’s shifting demand forecasts. Relations between Oracle and site developer Crusoe were also reportedly strained after data centre buildings went offline for days earlier this year due to winter weather affecting liquid cooling machinery.Both companies pushed back on the characterisation that things had gone wrong. Oracle said it was “very proud of our relationship and our progress in bringing capacity online.” Crusoe said the two were “operating in lockstep to deliver one of the world’s largest AI factories in Abilene.” OpenAI infrastructure executive Sachin Katti, posting on social media after the story broke, acknowledged the pivot without framing it as a problem: the Abilene site is one of the largest AI data centre campuses in the US, he wrote, but OpenAI “ultimately chose to put that additional capacity in other locations.“Meanwhile, Nvidia—which had a stake in ensuring the expanded facility still ran its chips rather than AMD’s—paid a $150 million deposit to Crusoe and began helping court Meta as a replacement tenant. Meta is now reportedly in active talks to take over the expansion.
“Today is your last working day”—how Oracle’s layoffs actually unfolded
For employees, there was no warning. Termination emails from “Oracle Leadership” arrived at 6AM IST in India and 3AM Pacific in the US. The message was blunt: your role has been eliminated, today is your last working day, submit a personal email address immediately before system access is cut.No manager call. No HR conversation. A toll-free number at the bottom of the email for questions.Teams across Oracle Health, Cloud, Sales, Customer Success, and NetSuite’s India Development Centre were hit. Units like RHS (Revenue and Health Sciences) and SVOS (SaaS and Virtual Operations Services) saw at least 30% reductions in a single sweep—senior engineers, architects, program managers, and operations leaders among those cut. A senior Oracle manager who wasn’t affected wrote on LinkedIn that the cuts were not performance-based.Oracle’s only public explanation for the workforce restructuring came not from any statement on the layoffs themselves, but from its Q3 FY2026 earnings release filed on March 10. The company said AI code generation has made its product development teams leaner by design—that it can now build more software in less time with fewer people, and is restructuring teams accordingly to be “smaller, more agile and productive.” That’s it. Oracle has not publicly connected the job cuts to the financial pressure of the OpenAI data centre buildout. The numbers, however, make that connection difficult to ignore. TD Cowen estimates the cuts could free up $8 to $10 billion in cash flow—cash Oracle badly needs. Capital expenditure is running at $48 billion annually, funded almost entirely by debt. Amazon, Google, and Microsoft are financing similar buildouts from their own operating cash. Oracle is doing it on credit, and its workforce is now part of how it’s managing the tab.
