An Oracle Corp. sign on the floor of the New York Stock Exchange (NYSE) on Wednesday, December 31, 2025 in New York, USA.
Michael Nagle | Bloomberg | Getty Images
oracle Shares rose in pre-market trading Wednesday as the multinational tech conglomerate considered cutting thousands of jobs to free up cash to build out its AI data center infrastructure.
The software giant has begun telling its 162,000 employees that new layoffs will affect thousands of them, two people familiar with the matter told CNBC on Tuesday. The company’s shares were last up 2.6% in early trading Wednesday. Oracle declined to comment on CNBC’s report.
Investors remain concerned about the company’s large capital expenditures on data centers capable of handling AI workloads. Although the stock closed up nearly 6% on Tuesday, Oracle shares are down about 25% since the beginning of the year.
In early February, the company announced plans to raise up to $50 billion in a combination of debt and equity during the 2025 calendar year to expand its ability to meet contract cloud demand from customers. Nvidia, Metaopen AI, advanced micro device And xAI.
Major AI hyperscalers Alphabet, Microsoft, Meta and Amazon have also pledged nearly $700 billion in capital spending this year to fund their AI buildouts, alarming investors as companies’ free cash flow will decline without a clear promise of short-term returns.
Oracle’s headcount reductions will help free up cash flow. barclays analysts said in a note Thursday. The investment bank said this is an overweight rating for the stock.
“Given ORCL’s existing FY26 restructuring plans and previous reports, today’s job cuts do not appear to be a surprise to the market. The market appears to appreciate the potential cost savings from ORCL’s actions amid the rapid build-out of the company’s AI infrastructure capabilities,” the analyst said.
Barclays also highlighted that Oracle earns less per employee than its competitors and has lower-than-average employee productivity. Analysts expect Oracle to triple its revenue over the next few years due to minimal employee growth and low operating costs.
