Oracle officially acknowledges AI adoption may reduce jobs, cuts 20,000 staff

Software and cloud giant Oracle has officially stated that its adoption of artificial intelligence (AI) could lead to job cuts. The company's annual report revealed a reduction of about 21,000 employees, or 13% of its global workforce, over the past year. This move is seen as part of a broader strategy involving increased investment in AI infrastructure and simultaneous restructuring.

Oracle reported that as of the end of the 2026 fiscal year (June 2025 to May 2026), its global full-time workforce would be 141,000 employees. This marks a significant decrease from the 162,000 employees recorded a year prior. In its report, Oracle stated, "The adoption and utilization of AI technologies across our operations have resulted and may continue to result in workforce reductions."

The company disclosed that it spent $1.84 billion on severance and other costs related to this restructuring, a nearly fivefold increase from the $374 million spent the previous year. Oracle cited management and product changes, performance management, shifts in business strategy, and post-merger integration as reasons for the workforce adjustments. While reports of layoffs had surfaced earlier in the year, this is the first official confirmation of the scale of the reductions.

This large-scale reduction in staff is occurring as Oracle accelerates its expansion into AI. The company has recently secured major data center supply deals with OpenAI and Meta, aiming to bolster its cloud business. Despite being considered a later entrant compared to Amazon Web Services (AWS) and Microsoft (MS) in the cloud market, Oracle is making aggressive investments, driven by the growing demand for AI. The company projects capital expenditures of approximately $70 billion for the current fiscal year, planning to raise $40 billion through debt and equity financing, including a previously announced $20 billion stock issuance.

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The adoption and utilization of AI technologies across our operations have resulted and may continue to result in workforce reductions.