Oracle has increased the estimated cost of its restructuring program by about $700 million, taking the total cost of its plan for fiscal 2026 to $2.8 billion amid increasing financial strain for the firm due to its huge AI data center expansion program.
The increase in the cost includes severance packages, contract termination costs and other exit costs. Oracle has accrued roughly $2.1 billion in costs related to the program, which it claims has been in part driven by AI implementation in some operations.
The tech major has laid off nearly 21,000 people in the last year, accounting for roughly 13 percent of its workforce. It laid off about 7,000 from research and development, 6,000 from sales and marketing, roughly 3,000 from cloud and services.
These reductions follow Oracle’s spending of tens of billions of dollars on its AI infrastructure that is meant to be used by customers like OpenAI. The company experienced negative free cash flow of $5.40 billion, and the plans are to raise $40 billion through debt and equity financing in the current fiscal year. The backlog for Oracle has reached $664 billion, of which half is expected to become sales within 36 months.
The CFO of the company, Hilary Maxson, noted that “actions to simplify and improve efficiency” helped preserve margins. In May, the company had around 49,000 US employees and 92,000 international ones.
In light of the above context, the founder and chairman of the company, Larry Ellison, entered a trading plan in June to enable himself to sell 50 million shares till October 24. Shares of the company fell by 16% since then. The stock of Oracle decreased by about 23% over the year, while the S&P 500 rose by almost 12%.
2026-09-14 18:58:00
