Oracle cuts 21,000 jobs in one year as AI data center spending hits $55.7 billion

Tech giant Oracle has relieved almost 21,000 people of their positions over the past fiscal year, amounting to a 13% reduction in its global workforce, as the company funneled tens of billions of dollars into artificial intelligence infrastructure, according to its annual 10-K filing with the Securities and Exchange Commission.

The filing, published on June 23, shows Oracle ended fiscal 2026 with approximately 141,000 full-time employees, down from 162,000 a year ago. The company attributed the job cuts directly to AI, stating that “deployment of AI technologies across our operations has resulted, and may continue to result, in reductions to our workforce.”

Oracle pays $1.8 billion in severance

The restructuring carried a price tag of about $1.8 billion in severance and related costs, the BBC reported, which is almost five times the $374 million Oracle spent on restructuring in the prior fiscal year.

Oracle acknowledged that its reorganization “can be disruptive” and warned it could face shortages of skilled workers in certain roles, potentially hurting productivity and earnings.

In a statement to the BBC, Oracle framed the changes as part of an ongoing realignment, stating that “As our cloud and AI businesses grow, we will continually balance our resources and restructure our development group to help ensure we have the right people delivering the best cloud and AI products to our customers around the world.”

Capital spending dwarfs revenue

Oracle’s capital expenditures in fiscal 2026 hit $55.7 billion, up 162% from $21.2 billion the previous year, according to the SEC filing. For context, the company posted adjusted revenue of $67.4 billion for the same period, meaning the capital expenditure consumed more than 80 cents per revenue dollar.

This spending spree dropped Oracle’s free cash flow, which swung to negative $23.7 billion, Yahoo Finance reported.

Oracle disclosed remaining performance obligations (RPOs), which represent the value of signed contracts not yet delivered, worth $638 billion, up from $138 billion a year earlier. A five-year, $300 billion agreement to supply data center capacity to OpenAI takes a huge chunk of these RPOs.

More tech job cuts amid AI spending

Amazon, Google parent Alphabet, Meta, and Microsoft are all collectively projected to spend around $725 billion on AI-related infrastructure this year, Yahoo Finance reported. That figure includes chips, data centers, and the development of new AI models.

These tech giants have also cut their workforces in similar patterns. Amazon has reduced its job headcount by about 30,000 positions, while Meta has cut around 8,000 roles during its own AI pivot. Employment tracking estimates show that more than 100,000 tech workers have lost their jobs in the past year across the entire tech sector, according to the BBC.

A senior Amazon executive wrote in an internal memo last October that the company needed to be organized “more leanly” because AI was “enabling companies to innovate much faster than ever before.”