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Oracle's AI Bet Strains Finances, Sparks Job Cuts
12 Sep
Summary
- Oracle faces escalating costs for AI data center development.
- Company increased planned job cuts to an estimated $2.8 billion.
- Chairman Larry Ellison has a new plan to sell 50 million shares.
Oracle Corp. is facing significant financial pressure as it invests heavily in building large-scale data centers essential for artificial intelligence workloads. The company's "2026 Restructuring Plan" has seen its estimated cost rise to approximately $2.8 billion, largely allocated for employee severance packages. Oracle has already recognized about $2.1 billion of these costs, with an additional $700 million anticipated.
This financial tightening is linked to the expensive build-out of AI data centers for clients such as OpenAI. Earlier in 2026, Oracle began cutting thousands of jobs to conserve cash, and plans for further reductions were reportedly in development. As of the end of May 2026, Oracle had reduced its global workforce by 21,000 employees compared to the previous year.
Amidst these financial challenges, Oracle's Chairman Larry Ellison, who holds a substantial stake in the company, has been granted a new share trading program. This plan, effective June 22, 2026, allows him to sell up to 50 million shares through October 24, 2026. Ellison has also been a key financial supporter of his son David's recent acquisition of Paramount Global and a substantial bid for Warner Bros. Discovery Inc.
