David Brooks
I won't sugarcoat it: Oracle is about to execute one of the most brutal layoffs in enterprise tech history. Between 20,000 and 30,000 employees will lose their jobs so Larry Ellison can chase his AI data center obsession.
The numbers are staggering: we're talking about 10% to 18.5% of Oracle's 162,000 employees. The stated goal is to save between $8 billion and $10 billion that will go straight into building AI data centers.
But here's the problem nobody wants to mention: Oracle doesn't have the money to do this. Their debt-to-equity ratio has hit 500%. Their bonds trade like junk bonds. US banks refuse to lend them money. And now, employees will pay the price for this desperate gamble.
If you ask me directly: this isn't strategic restructuring. It's financial survival disguised as technological vision.
Oracle's Financial Crisis: Scary Numbers
To understand why Oracle is willing to fire nearly a fifth of its workforce, you need to look at their financial situation. And it's not pretty.
Debt Piling Up at Breakneck Speed
| Metric | Value | Context |
|---|---|---|
| Debt accumulated (last 2 months) | $58 billion | More than the GDP of many countries |
| Debt-to-equity ratio | 500% | High-risk territory |
| Bond rating | Junk | Investors are fleeing |
| Stock drop since Sept. 2025 | -50% | Half the value evaporated |
In just two months, Oracle has accumulated $58 billion in additional debt. To put that in perspective: that's more than what Microsoft paid for LinkedIn and Nuance combined.
The 500% debt-to-equity ratio means that for every dollar of equity, Oracle owes five dollars. In the financial world, this is troubled company territory. Not NASDAQ-listed tech giants.
The Stock Collapse
Since September 2025, Oracle shares have lost half their value. Investors are voting with their feet, and the message is clear: they don't trust Larry Ellison's strategy.
My verdict is clear: when your stock drops 50% in less than six months and your bonds trade like junk, you're not in a position to make multi-billion dollar bets on AI infrastructure. You're in survival mode.
Why Banks Are Turning Their Backs on Oracle
Here's the part that should worry any Oracle employee: US banks are refusing to finance the company's data center projects.
The Blue Owl Case: $10 Billion Rejected
Blue Owl, one of the world's largest private credit funds, refused to finance Oracle's data center project in Michigan. We're talking about a $10 billion investment that no lender wants to touch.
When funds that specialize in high-risk loans tell you no, you have a serious credibility problem.
The Reason Behind the Rejection
Lenders are seeing something Oracle doesn't want to publicly admit:
- Cash flow doesn't justify more debt: Oracle is already stretched to the max
- OpenAI contracts are uncertain: Large customers are diversifying (more on this later)
- Competition is brutal: AWS, Azure, and Google Cloud have more financial muscle
- Acquisition history: The Cerner debt ($28.3 billion) still weighs heavily
If neither banks nor private credit funds want to lend you money for infrastructure projects, what's the alternative? Fire tens of thousands of employees and use those savings as capital.
It's a brutal strategy, but mathematically logical if you have no other options.
The OpenAI Contract That Became a Nightmare
Oracle signed what looked like the deal of the century: Stargate, a $300 billion collaboration over five years to build AI infrastructure in the United States.
But things aren't going according to plan.
OpenAI Diversifies and Oracle Loses
While Oracle was celebrating the Stargate deal, OpenAI was signing contracts with other providers:
| Provider | Contract Amount | Status |
|---|---|---|
| Microsoft | $250 billion | Active and growing |
| Amazon | $38 billion | Workloads migrating |
| Oracle (Stargate) | $300 billion | Uncertain |
OpenAI is moving workloads to Microsoft and Amazon. The obvious question: if Oracle is Stargate's main partner, why is OpenAI diversifying so aggressively?
The Reality of Stargate
The Stargate project sounded impressive in press releases: $300 billion in AI infrastructure, with Oracle as a key partner.
But there are several problems:
- It's a 5-year commitment: Significant payments won't arrive for years
- Oracle needs money now: They can't wait 5 years to see returns
- Competition is getting ahead: Microsoft and Amazon already have the infrastructure
- Debt grows every month: Every day of waiting worsens the financial situation
I won't sugarcoat it: Oracle sold Stargate as their ticket to the AI future, but now it looks more like a distant promise than a near reality.
Will Oracle Sell Cerner?
When a company desperately needs cash, it starts selling assets. And Oracle has a very valuable one: Cerner, the healthcare platform they acquired for $28.3 billion in 2022.
Why Cerner Could Be on the Chopping Block
The signs are there:
- Oracle needs immediate liquidity: Layoffs will save money but won't generate new cash flow
- Cerner isn't core business: It's healthcare, not cloud or databases
- The healthcare IT market is hot: There are potential buyers with money
- The acquisition debt still weighs: $28.3 billion that could be partially recovered
Larry Ellison's Dilemma
Selling Cerner would be admitting the acquisition was a strategic mistake. Larry Ellison isn't known for admitting mistakes.
But if the alternative is to keep accumulating debt while banks close their doors, selling Cerner starts to look inevitable.
My verdict is clear: Oracle will sell Cerner in the next 12-18 months. Not because they want to, but because they'll have no other choice.
What It Means for the 30,000 Employees
Now comes the hardest part of this analysis: the human impact.
How the Layoffs Are Being Executed
According to current employee reports, Oracle is using tactics reminiscent of Amazon's mass layoffs and Microsoft:
- Zoom layoffs: Employees are receiving the news in 15-minute video calls
- Lost RSUs: Restricted stock units that haven't vested are completely lost
- No transition time: Many lose system access the same day
- Cold communication: Generic emails instead of personal conversations
The Financial Impact for Those Affected
| Aspect | Impact |
|---|---|
| Unvested RSUs | Completely lost |
| Stock options | Worthless if the stock keeps falling |
| Healthcare | COBRA temporarily, then nothing |
| Severance | Variable, depends on tenure |
For an average Oracle employee with 5 years of tenure, losing unvested RSUs can mean tens of thousands of dollars they'll never see.
The Job Market for Ex-Oracle Employees
The good news: Oracle talent is valued in the market. Database engineers, cloud specialists, and ERP experts have options.
The bad news: the tech sector continues mass layoffs. AWS, Microsoft, and Google are also optimizing headcount. Competition for enterprise roles will be fierce.
My advice for those affected: don't wait. Update LinkedIn today, activate job alerts, and start networking before 30,000 more people flood the market.
My Analysis: Is This Good or Bad Strategy?
After years covering the enterprise sector, it's time for me to give my verdict on Oracle's strategy.
What Oracle Is Doing Right
Nothing.
I won't sugarcoat it: I can't find solid arguments to defend this strategy.
Firing 18.5% of your workforce to finance projects that banks don't want to finance is a sign of desperation, not strategic vision.
What Oracle Is Doing Wrong
-
Betting everything on one card: Generative AI is promising, but Oracle is competing against companies with much more financial muscle (Microsoft, Amazon, Google)
-
Destroying talent to finance hardware: Data centers are commodities. Human talent is a differentiator. Firing senior engineers to build more servers is short-term gain, long-term pain.
-
Ignoring market signals: When your stock drops 50%, your bonds are junk, and banks reject you, the market is telling you something. Oracle isn't listening.
-
Losing the war before starting: Microsoft has a privileged relationship with OpenAI. Amazon has AWS. Google has TPUs and Gemini. Oracle arrives late with fewer resources.
My Final Verdict
If you ask me directly: Oracle is executing a suicidal strategy.
They're destroying their most valuable asset (human talent) to chase a race they've already lost. The $10 billion they'll save by firing 30,000 people is a drop in the ocean compared to the $250 billion Microsoft is investing in OpenAI.
Larry Ellison, at 80 years old, seems determined to bet Oracle's future on one last grand play. But the math doesn't lie: with a 500% debt-to-equity ratio and junk bonds, this bet is more likely to destroy Oracle than save it.
The 30,000 employees who will lose their jobs deserved better. They deserved a company that found ways to compete without sacrificing its people.
Instead, they'll be victims of a desperate bet for a future Oracle will probably never reach.
Frequently Asked Questions (FAQs)
How many employees will Oracle lay off in 2026?
Oracle plans to lay off between 20,000 and 30,000 employees, representing 10% to 18.5% of its total workforce of 162,000 workers. The goal is to save between $8 billion and $10 billion to finance the construction of artificial intelligence data centers.
Why does Oracle need layoffs to finance its AI data centers?
Oracle faces a financing crisis: their debt-to-equity ratio has reached 500%, their bonds trade like junk, and US banks refuse to lend money for infrastructure projects. Blue Owl, a private credit fund, rejected financing the $10 billion Michigan project.
What is the Stargate project and how does it affect Oracle?
Stargate is a $300 billion five-year collaboration to build AI infrastructure in the United States, with Oracle as a key partner. However, OpenAI is diversifying its workloads to Microsoft ($250 billion) and Amazon ($38 billion), creating uncertainty about the agreement's future.
Will Oracle sell Cerner?
It's very likely. Oracle acquired Cerner, a healthcare platform, for $28.3 billion in 2022. Given the urgent need for liquidity and that Cerner isn't part of Oracle's core business (cloud and databases), a sale seems inevitable in the next 12-18 months.
How are the layoffs being executed at Oracle?
According to employee reports, layoffs are being conducted via Zoom video calls, with cold communications and immediate loss of system access. Employees completely lose RSUs (restricted stock units) that haven't vested, which can represent tens of thousands of dollars.
How much debt has Oracle recently accumulated?
In just two months, Oracle has accumulated $58 billion in additional debt. Combined with pre-existing debt from the Cerner acquisition and other commitments, the company's financial situation is precarious, with a 500% debt-to-equity ratio.
Conclusion: The Human Cost of a Desperate Bet
Oracle is executing what could be the most serious strategic error in its history. Firing 30,000 employees to finance an AI race they've probably already lost is a decision that will have consequences for years.
The numbers are clear:
- $58 billion in debt accumulated in 2 months
- 500% debt-to-equity ratio
- -50% stock drop since September
- 30,000 employees who will pay the price
While Microsoft, Amazon, and Google build the AI future with healthy balance sheets and unlimited access to capital, Oracle tries to compete by firing people and accumulating debt.
My verdict is clear: this strategy won't save Oracle. It will only prolong their agony while destroying tens of thousands of careers and families.
Larry Ellison dreamed that Oracle would lead the AI revolution. Instead, his company will be remembered as the example of how NOT to compete in the artificial intelligence market.
To the 30,000 affected employees: I'm sorry. You deserved better leadership and better strategy. Instead, you became victims of a bet that should never have been made.
