Oracle plans layoffs after a 13% workforce cut this year, as billions in AI debt pile up. The company spent $55.7B on infrastructure, burning $23.7B in cash. Stock down 26%.
Alpha Score of 45 reflects weak overall profile with weak momentum, weak value, strong quality, weak sentiment.
Oracle has drawn up plans for a new round of job cuts this month, aiming to reduce payroll as it borrows tens of billions to fund AI infrastructure, according to people familiar with the plans and an internal document viewed by Business Insider.
The cuts could hit double-digit percentages on some teams, the document showed. Managers have been asked to provide lists of affected employees, with the goal of reducing headcount by the time the second quarter begins on Sept. 1, one of the people said.
Oracle's workforce already shrank by 21,000, or 13%, in the fiscal year that ended May 31, including through earlier layoffs, a recent filing showed. The company now has about 141,000 employees.
The move highlights the tradeoffs of the AI infrastructure boom. Oracle spent $55.7 billion on data centers and equipment in the 2026 fiscal year, spending $23.7 billion more in cash than it brought in. It raised $43 billion through debt and $5 billion from stock sales during the year, and expects to raise roughly another $40 billion through a mix of debt and equity in the current fiscal year.
Revenue rose 17% in the latest fiscal year, with cloud infrastructure revenue jumping 77%, as demand for AI computing power surged. That growth requires heavy investment in data centers, marking a shift for a company built on selling database software.
Oracle's stock is down about 26% this year. The sell-off reflects broader Wall Street anxiety about skyrocketing infrastructure costs across the industry, as well as fears that AI will replace traditional software tools, which has driven a broad decline in software stocks. On an earnings call in March, Chairman Larry Ellison downplayed those fears, telling analysts he believes the so-called SaaSpocalypse will be a problem for other companies, not his.
The pressure on Oracle to cut costs while spending heavily on AI infrastructure is a microcosm of a broader tension in the market. Companies pouring capital into AI data centers are under scrutiny from investors who want to see a return on that spending. The pullback in Oracle's stock suggests the market is pricing in more risk, not less, around the pace of AI buildout.
Oracle's Alpha Score sits at 44 out of 100, a Mixed label, reflecting the conflicting signals from its revenue growth and its debt-fueled expansion. The stock page provides a fuller picture of the company's valuation and risk metrics.
For the broader market, the Oracle story reinforces a theme that has weighed on tech stocks all year: the cost of AI dominance may be higher than initially expected. The company's next earnings report, due in September, will offer a fresh look at whether the spending is translating into sustained revenue growth, or if the layoffs are a sign that even the winners feel the squeeze.
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