Oracle has increased funding for its restructuring plans for the current financial year by $500 million, with some observers anticipating a spate of job losses.
In a call with investors earlier this week, co-CEO Mike Sicilia said that Big Red was using AI coding tools to reduce the size of engineering teams, which can “deliver more complete solutions to our customers more quickly.”
He claimed that Oracle had just built three new customer experience (CX) applications, plus a new website generator.
Oracle has increased its debt burden in recent months, while financial researchers have suggested that the company may need to cut up to 30,000 jobs to help fund its AI datacenter spending commitments.
A regulatory filing this week stated that Oracle’s 2026 Restructuring Plan is increasing from $1.6 billion in Q2 to $2.1 billion in the quarter ending February 28. Oracle’s financial year finishes at the end of May.
Oracle wowed the stock market last year when it announced remaining performance obligations (RPOs) — contracts signed but not yet paid for — in the first quarter of its 2026 fiscal year of $455 billion.
It has since emerged that the $300 billion cloud compute contract with OpenAI alone would require Oracle to borrow roughly $100 billion over the next four years. Big Red has raised $18 billion in debt in an effort to fund a massive datacenter building program.
Ratings agency Moody’s said that the OpenAI “contract size is staggering — highlighting the tremendous potential for Oracle’s AI Infrastructure. However, the related risks of the build are significant.”
It pointed to the significant “counterparty risk” in Oracle’s projected growth – the possibility that another party fails to meet its obligations.
In January, investment bank TD Cowen said that Oracle could cut up to 30,000 jobs and sell health tech unit Cerner to ease its AI datacenter financing challenges. It said equity and debt investors are increasingly questioning how Oracle will finance its datacenter building program. The bank estimates that the OpenAI deal alone will require $156 billion in capital spending.
Asked about the company’s debt levels on a recent earnings call, co-CEO Clay Magouyrk said AI datacenters could return a gross margin of 30 to 40 percent. “As we continue to get better and better at running these datacenters, delivering them more cheaply, optimizing the amount of cost of networking and hardware spend as well as power, we see that continuing to incrementally improve.” ®