Oracle reduced its global workforce by approximately 21,000 employees during its latest financial year as the company reorganised its operations and increased spending on artificial intelligence infrastructure.
Oracle employed about 141,000 full-time workers as of May 31, 2026, down from roughly 162,000 one year earlier. The 13% reduction was disclosed in the company’s latest annual report.
AI Deployment Contributes to Workforce Reductions
Oracle said the adoption and deployment of AI across its operations had resulted in workforce reductions and could lead to further cuts. The company also attributed its restructuring to changes in management and products, employee performance, acquisitions, and shifts in business priorities.
The restructuring generated $1.84 billion in severance payments and other exit costs during fiscal 2026. That was nearly five times the $374 million recorded in the previous financial year.
Oracle warned that workforce adjustments could disrupt its operations and leave some departments without enough employees who possess specialised skills. Such shortages could reduce productivity and affect its financial performance.
Reports of significant job cuts emerged in April, but Oracle had not previously disclosed their full global scale. The annual report showed that around 49,000 of its employees were based in the United States, while approximately 92,000 worked internationally.
Oracle Increases Spending on AI Data Centres
The cuts come as Oracle commits more capital to cloud infrastructure for AI companies and enterprise customers. Its Oracle Cloud Infrastructure division supplies computing capacity to companies including OpenAI and Meta.
Oracle expects to spend about $70 billion on capital projects during its current financial year, up from $55.7 billion in fiscal 2026. The investments will primarily support data centres, servers, networking equipment, and other cloud infrastructure.
The company reported record fiscal 2026 revenue of $67.4 billion, an increase of 17%. Its cloud revenue rose 39% to $34 billion, while infrastructure-as-a-service revenue increased 77% to $18.1 billion, according to its full-year results.
Oracle also warned that its AI investments carry financial risks. The company may fail to recover its spending if competitors develop more popular products or if the cost of building and supporting its services exceeds expectations.
Technology companies have increasingly reduced headcount while directing more capital toward AI. Amazon and Meta have also announced workforce reductions as they expand data centres and computing capacity for AI models and services.
Featured image credits: Wikimedia Commons
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