A funding squeeze is forcing tough choices at Oracle. The company is considering cutting 20,000–30,000 jobs and selling some business units as US banks step back from financing its AI data-center expansion, according to an investment bank.
The proposed layoffs could release $8 billion–$10 billion in cash flow. Oracle is also reviewing a possible sale of its healthcare software unit, Cerner, which it bought for $28.3 billion in 2022. The move comes after several US lenders reduced support for Oracle-linked data-center projects. “Both equity and debt investors have raised questions regarding Oracle’s ability to finance this buildout,” the report said.
The challenge is scale. Oracle’s infrastructure plans require about $156 billion in capital expenditure. As banks pull back, borrowing costs have jumped. Interest rate premiums for Oracle’s data-center projects have nearly doubled since September, pushing costs closer to non-investment grade levels. This has delayed deals. “Multiple Oracle data-center leases that were under negotiation with private operators struggled to secure financing, in turn preventing Oracle from securing the data-center capacity via a lease,” the report said.
Oracle has already raised about $58 billion in 2 months: $38 billion for Texas and Wisconsin, and $20 billion for New Mexico. That is only a fraction of what is needed. Asian banks are still lending at higher rates, helping overseas growth but not solving US capacity gaps. The report warned that limited capacity could restrict revenue growth.
To cut capital needs, Oracle now asks new customers for 40% upfront deposits. It is also testing “bring your own chip” (BYOC) models, shifting hardware costs to clients. Analysts say BYOC plus job cuts are the most likely path, though both carry risks.
The potential cuts would be the company’s largest in years. The company reduced about 10,000 roles in late 2025 under a $1.6 billion plan. Cerner has also seen repeated layoffs since 2023.
Customer ties are shifting. OpenAI has moved near-term capacity to Microsoft and Amazon. This follows the company’s earlier lease of about 5.2GW across Texas, Wisconsin, Michigan, and New Mexico for OpenAI work.
One analyst said the bank split is a warning: “The difference in sentiment between US and Asian banks isn’t just a minor detail; it’s the first serious sign of financial friction in Oracle’s hyperscale ambitions.” Another took a calmer view, noting Oracle’s cloud infrastructure revenue rose 66% year on year, and GPU-related infrastructure climbed 177% in the quarter ended November 30.
Both agreed companies should reduce risk through multi-cloud and multi-vendor strategies.
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