Oracle lays off thousands: AI infrastructure is a money burner, the stock price is down 27% year-to-date, first round of streamlining after the new co-CEO takes office

Software giant Oracle began notifying employees on March 31 that the company is carrying out another round of layoffs. According to two people familiar with the matter who spoke to the media, the number of employees laid off this time reached several thousand. As of May 2025, Oracle has 162,000 employees. Oracle declined to comment.

AI is burning cash, and the stock price is under pressure—layoff cost controls

Oracle’s situation this year is quite contradictory: on the one hand, contract revenue on the books has hit record highs; on the other hand, the stock price has continued to fall. Since the start of this year, Oracle’s share price has dropped 27%. The market is mainly concerned about two things: first, the competitive pressure brought by the rise of generative AI models, which could erode Oracle’s market position in its core database business; second, Oracle is sharply increasing capital expenditures as it builds data center infrastructure capable of supporting AI workloads, squeezing free cash flow.

While maintaining its core enterprise database business, Oracle in recent years has actively shifted toward AI cloud infrastructure, investing heavily in building data centers. This “old business funds new investment” model leaves investors questioning its outlook for profitability.

OpenAI deal brings a $300 billion contract, but cash flow pressure remains

In September 2025, Oracle disclosed that its Remaining Performance Obligations (RPO, meaning revenue that has been contracted but not yet recognized) surged by 359%, reaching $455 billion, of which more than $300 billion came from agreements signed with OpenAI. These figures show that Oracle has secured huge order commitments in the AI infrastructure race.

However, the size of the order value does not equal an immediate cash inflow. Oracle needs to spend money first to build data centers before it can recognize this revenue gradually, which is at the heart of the market’s concerns about its short-term cash flow pressure.

After the dual-CEO structure was put in place, the first wave of organizational reshuffling began

These layoffs also occurred shortly after Oracle completed a handover of top leadership. In September 2025, Oracle announced that Mike Sicilia and Clay Magouyrk would serve as co-CEOs, replacing Safra Catz, who had held the job for many years. After the new leadership team took office, the organizational restructuring was seen by the industry as one of the important background factors for these layoffs.

The tech industry’s layoffs wave has not abated since 2022, and Oracle’s move into the mix once again confirms that the organizational reshaping brought by AI transformation is accelerating across the industry: on one side, massive AI infrastructure investment; on the other, a trimming of labor in traditional businesses—this “more machines, fewer people” model is spreading faster throughout the tech sector.

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