STOCKS | Oracle Begins Another Round of Layoffs Amid Expanded AI Spending

Oracle has reportedly started another round of layoffs. According to Sina Finance, citing foreign media, the layoffs formally began on Monday, and an internal document showed that some teams faced cuts of double-digit percentages. The report said a copy of the layoff notice email stated that, after careful consideration of Oracle's current business needs, the company decided to eliminate the recipient's position as part of a broader organizational restructuring, making that day the employee's last day at the company. The layoffs follow earlier cuts this year. Oracle first disclosed a restructuring plan at the start of the year, when total costs were expected to reach $2.1 billion. By April 2026, the company had begun layoffs. In June, when Oracle released its annual report, it disclosed that headcount had fallen by 21,000 in fiscal 2026 ended May 31, 2026, a decline of 13%. Those cuts resulted in $1.84 billion in severance and termination costs. Before the latest layoffs, Oracle had about 141,000 employees. Oracle's September quarterly report showed that management had decided to add about $700 million to the restructuring plan to reflect additional actions expected as the company pushes ahead with a costly AI data center buildout. The plan, approved in fiscal 2026, covers severance, contract termination fees, and related exit costs, indicating the layoffs are expected to expand. Oracle said part of the reason was the adoption of AI technology in some functions. Against that backdrop, co-founder and Executive Chairman Larry Ellison canceled a plan to sell up to 50 million Oracle shares. Based on last Friday's closing price, the shares were worth about $7.5 billion. Oracle said on Saturday that no shares were sold under the plan and that Ellison had no other plans to sell Oracle stock. The company did not say why the plan was canceled. Oracle has been investing heavily in AI data center infrastructure, betting that AI demand will keep growing. The company reported capital expenditures of $28.5 billion in fiscal 2027's first quarter, far above $8.5 billion a year earlier. It also plans to raise about $40 billion through borrowing and share issuance this fiscal year. In fiscal 2026, capital expenditures reached $55.7 billion, leaving cash outflows $23.7 billion above revenue. Oracle's total debt has reached $125 billion. Despite the financial pressure, Oracle's first-quarter results were still strong. On September 10, Oracle reported fiscal 2027 first-quarter earnings, with quarterly revenue up 30% year over year to $19.3 billion. Under U.S. GAAP, net income rose 60% to $4.7 billion, and earnings per share increased 55% to $1.56. Non-GAAP earnings per share were $1.92, up 30%. Although the latest earnings report showed some positive signs, including growth in the cloud business, investor concerns about the cost of Oracle's AI expansion and questions about the future of its legacy software business have still left the stock down about 25% this year. As of the U.S. market close on September 14, Oracle shares were at $144.72, down 3.7%.