Oracle’s AI transformation gets more expensive as layoffs continue

Key Points:

• Oracle has increased the expected cost of its fiscal 2026 restructuring program by about $700 million, raising the total to approximately $2.8 billion, driven partly by AI adoption across its operations.
• The restructuring includes significant workforce reductions, with Oracle having cut around 21,000 jobs (13% of its workforce) over the past year, affecting nearly all major divisions including R&D, sales, marketing, cloud, services, and hardware.
• Despite ongoing job cuts, Oracle is investing heavily in AI infrastructure, planning to raise $40 billion through debt and equity financing this fiscal year, though it reported a negative free cash flow of $5.4 billion.
• Oracle’s backlog increased to $664 billion, with expectations that about half will convert to sales within 36 months; however, investor skepticism remains about the company’s ability to generate sufficient cash flow from its AI expansion.
• Oracle co-founder Larry Ellison canceled a planned $7.5 billion stock sale amid the company’s stock decline, holding over 38% of Oracle shares and signaling no current plans to sell shares despite market volatility.