Oracle is contemplating substantial job cuts, potentially eliminating between 20,000 and 30,000 positions, as it grapples with challenges in securing funding for its artificial intelligence (AI) data centres.

According to investment bank TD Cowen, the US tech firm aims to generate $8bn to $10bn in cash flow through these reductions. Additionally, Oracle is exploring the sale of Cerner, its healthcare software division, which it acquired for $28.3bn in 2022.

The company’s ability to finance its infrastructure projects, estimated to require $156bn in capital expenditure, has been hindered by reduced lending involvement from several US banks.

This shift has resulted in increased borrowing costs, with lenders doubling interest rate premiums since September, leading to delays in project agreements and hindering the construction of necessary facilities.

Despite raising around $58bn for new centres, including $38bn allocated to Texas and Wisconsin and another $20bn for New Mexico, Oracle has only covered a small portion of its total requirements.

Asian banks have started supplying funds at higher rates, offering Oracle opportunities for international growth but leaving domestic challenges unresolved.

To reduce capital needs, Oracle has begun requiring 40% upfront payments from new customers and is considering ‘bring your own chip’ models where clients provide their own hardware. These measures aim to shift financial burdens away from the company.

However, both approaches pose operational risks, including potential contract renegotiations and impacts on workforce capabilities.

TD Cowen noted that a combination of workforce cuts and customer-provided hardware may be the most feasible approach for Oracle under current conditions.

Any reduction would represent the largest workforce change at Oracle in recent years, surpassing the 10,000 layoffs executed in late 2025 as part of its restructuring efforts.

OpenAI recently shifted capacity demand to competitors such as Microsoft and Amazon, even though Oracle had previously leased substantial capacity specifically for OpenAI workloads across multiple US states.

Procurement activity has slowed significantly as the market adapts to Oracle’s revised financing strategy.

Industry perspectives differ regarding the potential consequences for businesses relying on Oracle’s cloud infrastructure.

Following the media reports, Oracle issued a statement reaffirming its partnership with OpenAI and said the reported stalled investment arrangement between Nvidia and OpenAI does not affect Oracle’s financial relationship with Sam Altman’s firm.

Oracle said it remains confident in OpenAI’s ability to secure funding and meet its obligations.

Oracle posted on X: “The NVIDIA-OpenAI deal has zero impact on our financial relationship with OpenAI. We remain highly confident in OpenAI’s ability to raise funds and meet its commitments.”