Oracle plans biggest layoffs in years as US banks retreat from AI infrastructure funding

US banks are retreating from funding large AI data-centre projects, triggering what could become one of the biggest rounds of layoffs in the technology sector in years. Oracle is weighing job cuts of up to 30,000 roles as financing pressures mount and borrowing costs rise, according to reports citing investment bank TD Cowen.

The potential layoffs, which would mark Oracle’s largest workforce reduction in recent years, come as lenders grow wary of the capital intensity and risks tied to AI infrastructure. CIO reported that TD Cowen estimates Oracle is considering cutting between 20,000 and 30,000 jobs, a move that could free up $8 billion to $10 billion in cash.

At the heart of the pressure is Oracle’s aggressive push into AI-driven data centres. TD Cowen estimates the company’s infrastructure commitments now require around $156 billion in capital spending, a figure that has unsettled both debt and equity investors. As a result, several US banks have stepped back from financing Oracle-linked data-centre projects, the research note said.

“Both equity and debt investors have raised questions regarding Oracle’s ability to finance this buildout,” TD Cowen wrote, adding that multiple US banks have pulled back from project lending tied to Oracle’s expansion plans.

The pullback has had immediate consequences. Borrowing costs for Oracle have risen sharply, with TD Cowen noting that lenders have roughly doubled interest-rate premiums on data-centre financing since September. Higher costs have stalled negotiations with private data-centre operators, preventing Oracle from securing the capacity it needs to meet customer demand.

Despite raising around $58 billion in recent months—including $38 billion for facilities in Texas and Wisconsin and $20 billion for New Mexico—the funding covers only a fraction of Oracle’s total requirements. Some Asian banks have stepped in, but at premium rates, seeking exposure to AI infrastructure growth, according to Reuters.

To ease financial strain, Oracle is also weighing strategic asset sales. TD Cowen said the company is considering selling Cerner, the healthcare software firm it acquired in 2022 for $28.3 billion. A sale would mark a significant shift for Oracle and underscore the scale of the funding challenge it faces.

If implemented, the job cuts would follow earlier reductions. Oracle cut an estimated 10,000 roles in late 2025 as part of a $1.6 billion restructuring programme, while Cerner has seen repeated layoffs since the acquisition, including cuts linked to difficulties with a US Veterans Affairs contract.

The funding squeeze is already reshaping customer relationships. TD Cowen said OpenAI has shifted some near-term capacity needs to Microsoft and Amazon, reducing reliance on Oracle’s infrastructure.

Oracle has not publicly commented on the reported job cuts, the potential sale of Cerner, or the pullback by US banks. However, analysts warn that continued caution from lenders could force further cost-cutting and strategic retrenchment across the AI infrastructure ecosystem.