Oracle considers 20k-30k job cuts and Cerner sale to fund AI data-center expansion

Oracle's AI infrastructure financing crisis

Investment bank TD Cowen reports Oracle is facing significant financing challenges for its AI data-center expansion, with US banks pulling back from project lending. The company needs approximately $156 billion in capital expenditure for infrastructure buildout but has struggled to secure financing.

Specific measures under consideration

• Workforce reductions: 20,000 to 30,000 job cuts, which would free up $8 billion to $10 billion in cash flow
• Cerner sale: Considering selling the healthcare software unit acquired for $28.3 billion in 2022
• Customer financing: Requiring 40% upfront deposits from new customers to help fund infrastructure
• BYOC arrangements: Exploring "bring your own chip" deals where customers supply their own hardware

Financing challenges and consequences

US banks have roughly doubled the interest rate premiums charged to Oracle for data-center project financing since September, pushing borrowing costs to non-investment grade levels. This has stalled multiple data-center lease negotiations with private operators, creating bottlenecks in Oracle's infrastructure rollout.

Oracle has already raised approximately $58 billion in debt markets: $38 billion for Texas and Wisconsin facilities, and $20 billion for New Mexico. However, Asian banks have become the primary lenders willing to finance Oracle's expansion at premium rates.

Impact on operations and customers

• OpenAI has shifted near-term capacity needs to Microsoft and Amazon
• Oracle leased approximately 5.2GW of US data-center capacity across Texas, Wisconsin, Michigan, and New Mexico specifically for OpenAI workloads earlier
• Data-center procurement has slowed dramatically, with Oracle "notably absent" from companies with major long-term US data-center roadmaps
• Private operators are holding back on signing large deals with Oracle

These workforce reductions would be Oracle's largest in recent years, following an estimated 10,000 job cuts in late 2025 as part of a $1.6 billion restructuring plan. The company has also repeatedly reduced headcount at Cerner since the acquisition.