Tens of thousands of Oracle employees woke on Tuesday to find a termination notice sitting in their inboxes. Sent at around 6 am under the name “Oracle Leadership,” the email informed recipients that their roles had been eliminated with immediate effect.

Staff told news outlets there was no prior conversation with HR, no call from a manager, and no notice period. System access was cut almost simultaneously. The company has roughly 162,000 staff globally and is shaping up to be the most significant single workforce reduction in its four-decade history.

Investment bank TD Cowen estimates the cuts could affect between 20,000 and 30,000 workers, approximately 18% of Oracle’s worldwide headcount. Oracle’s leadership has framed the reductions as part of a broader effort to manage the rising costs associated with its ambitious AI infrastructure plans, stressing that AI is driving productivity gains rather than signalling any decline in the underlying business.

That may be technically true, but the financial picture is considerably more complicated. Oracle has taken on $58 billion in new debt in just the past two months and raised $50 billion through a bond offering in February alone.

Its stock has shed more than half its value since peaking last September. The contrast is striking: the company posted a 95% jump in net income last quarter, reaching $6.13 billion.

The Stargate gamble

The root of this squeeze lies in Oracle’s decision to plant its flag firmly in the AI infrastructure race. Oracle and OpenAI have entered an agreement to develop 4.5 gigawatts of additional Stargate data centre capacity in the United States, a partnership that exceeds $300 billion between the two companies over the next five years.

The scale of the ambition creates its own problems. Oracle is the only major player funding the AI buildout principally through debt, carrying over $100 billion on its books while free cash flow has turned negative.

Oracle denied reports earlier this year that it planned to shelf the expansion of the flagship data centre campus in Texas.

The move would have marked a reversal for the tech giants just months after unveiling their ambitious $500 billion Stargate project. Last year Musk slammed the news that OpenAI had pledged to invest a whopping $500 billion in AI infrastructure with support from SoftBank, Microsoft, Oracle, and MGX., claiming it ‘doesn’t have the money’ to complete the project.

However, Oracle hit back at the claims via a statement on X. “First, Crusoe and Oracle are operating in lockstep to deliver one of the world’s largest AI Data centers in Abilene at record-breaking pace.

“Two buildings are completely operational, and the rest of the campus is on track. Second, Oracle has completed leasing for the additional 4.5GW to deliver on our commitments to OpenAI. We continuously evaluate sites around the world to meet the growing demand for OCI by working with great partners and customers all the time.”

A sector-wide reckoning

Oracle’s cuts do not exist in isolation. As Capacity has reported extensively over the past 12 months, the digital infrastructure and enterprise technology space has been working through a sustained period of workforce restructuring that shows little sign of abating.

Dell cut 10% of its workforce in FY26, accounting for nearly 11,000 jobs, following a similar 10% reduction the year prior, with the company simultaneously forecasting that revenue from its AI-optimised server business will double by FY27.

Ericsson proposed around 1,600 role reductions in Sweden in January as part of global cost-cutting efforts, while Tata Consultancy Services continued layoffs into 2026 following a reduction of more than 11,000 employees the previous year.

Meta, meanwhile, is reportedly planning to cut around 16,000 jobs as it focuses investment on AI, even as it commits approximately $600 billion to new AI infrastructure and data centres by 2028.

January 2026 was the worst month for job cut announcements since the 2009 recession, with US companies announcing more than 100,000 cuts in a single month. Industry tracking suggests that by the end of 2025, more than 50,000 jobs in the US technology sector were directly linked to AI adoption and automation announcements, contributing to over 1.1 million total job cuts across sectors – the highest since the pandemic era.

Oracle follows the lead of many technology giants, including Telstra, Salesforce, Amazon, Meta and Ericsson  which have all recently made job cuts.