Oracle to fire 30,000 employees to cut costs — plans to spend billions on AI to replace them

The move reflects a broader shift in tech as companies redirect money from payroll to AI infrastructure

PUBLISHED 2 HOURS AGO

Oracle co-founder and Chairman Larry Ellison delivers a keynote address during the Oracle OpenWorld (Cover image source: Getty Images/Photo by Justin Sullivan)

Even as many suggest that AI will act as a tool to increase productivity instead of a replacement for workers, the technology is already triggering layoffs across sectors. Joining the wave, tech giant Oracle is planning to cut thousands of jobs as it transforms from a data-centre firm into an AI infrastructure provider, Bloomberg has reported. As the company tries to compete with much larger rivals, it is expected to burn cash rapidly, raising questions among investors about whether the spending will eventually pay off.

Layoffs are expected to affect roughly 20,000 to 30,000 workers, possibly cutting 12–18% of its global workforce of roughly 162,000 employees, tech magazine CIO reported. It could begin as early as March, according to Bloomberg.

Oracle has ramped up investment in massive data centres that run artificial intelligence in order to compete with larger rivals such as Microsoft, Amazon, Meta and Google, which together have announced plans to spend about $650 billion on AI infrastructure in 2026 alone. Much of this spending, long before profits become visible, is forcing companies to trim costs elsewhere, reflecting a broader change in how technology firms are allocating capital.

Representative image from an AI event (Cover image source: Getty Images | Michel Porro)

Microsoft cut about 15,000 jobs last year amid rising spending on data centres and AI software development. Meanwhile, Block announced layoffs affecting nearly half of its staff, with co-founder Jack Dorsey citing the efficiency-boosting potential of AI.

Reuters reported that Oracle expects capital expenditure for 2026 to reach about $50 billion, with investors worried about how the company will fund its data-centre expansion. Oracle also has a $300 billion infrastructure deal with OpenAI, and building the facilities needed to support such projects requires huge investment, as data centres are extremely expensive.

Developers in the Reddit r/artificialintelligence community argue that the trend reflects a reallocation of capital rather than AI directly replacing jobs, with companies pouring money into infrastructure while cutting costs elsewhere. While in discussions on Hacker News, a technology forum run by Y Combinator, engineers often highlight the extreme cost of building AI systems. One commenter noted, “The problem is that inefficient systems will cost even more as you scale their use, but gains from such systems are not guaranteed, and profits even less so."

The shift comes at a time when recent job data for February showed weakness in the tech sector, with employment declining after the latest numbers were released. There have already been significant layoffs across the industry in 2026, many linked to AI restructuring and efficiency efforts.

One Reddit user wrote on r/employeesofOracle, “The last cuts hit too hard in some areas. Some of my peer teams are missing delivery dates. My team’s backlog is only growing. Another round of cuts will only exacerbate this.”

Economist Joseph Politano shares his take on the job data, comparing it to the 2024 "tech-cession" on LinkedIn

Los Angeles Times Guild members rally outside City Hall against ‘significant’ imminent layoffs at the Los Angeles Times newspaper | Getty Images | Photo by Mario Tama

John Penney, chief growth officer at NextGen Foundry, wrote on LinkedIn that AI-driven data-centre investment could reach multi-trillion-dollar levels by the end of the decade. The risk, he said, is a mismatch between capital spending and revenue generation. Companies are investing billions in infrastructure before sustainable business models emerge. The pattern, he says, echoes research by David Kirsch and Brent Goldfarb of the University of Maryland, whose work shows that investment booms often run ahead of durable business models.