Oracle is evaluating sweeping cost reduction measures as it looks to fund an ambitious push into AI focused cloud infrastructure. The technology major is weighing layoffs affecting 20000 to 30000 employees and is also exploring a possible sale of its healthcare software unit Cerner, which it acquired in 2022 for $28.3 billion, or about ₹2.35 lakh crore. These steps are being considered as Oracle faces rising financial pressure linked to its large scale data centre expansion plans.
Funding challenges have intensified as lenders grow cautious about the size and speed of Oracle’s infrastructure commitments. Interest rate premiums on project financing tied to Oracle backed data centres have nearly doubled in recent months, pushing borrowing costs closer to levels seen among non investment grade borrowers. As a result, several proposed data centre lease deals with private operators have stalled after failing to secure funding, creating delays for Oracle which relies on both owned and leased facilities to scale its cloud and AI offerings.
Oracle’s total infrastructure commitments are estimated at around $156 billion, nearly ₹12.9 lakh crore, putting sustained strain on cash flows even as demand for AI computing continues to rise. The potential divestment of Cerner is therefore drawing close attention. Analysts say a sale could unlock immediate liquidity and ease near term funding stress, allowing Oracle to focus resources on its AI and cloud roadmap. However, it would also signal a step back from healthcare IT, a sector Oracle had earlier positioned as a long term growth driver. Supporters see the move as practical, while critics warn it could weaken diversification.
The company plans to raise $45 billion to $50 billion, or about ₹3.7 lakh crore to ₹4.1 lakh crore, this year to expand capacity for Oracle Cloud Infrastructure. Co founder Larry Ellison has said funding would come from a mix of debt and equity. Oracle has highlighted strong contracted demand from customers such as AMD, Meta, NVIDIA, OpenAI, TikTok and xAI. While no layoffs or asset sales have been officially announced, industry watchers see this as a clear signal of how rising costs and tighter funding are forcing even large technology firms to balance aggressive AI investment with cost control and workforce stability.
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