Oracle lays off 21,000 employees in just 12 months due to AI adoption and costly AI infrastructure ambitions - says layoffs will continue as internal AI deployment grows

Oracle cut 21,000 jobs in fiscal year 2026 as AI automation and AI cloud expansions reshape its workforce and spending strategy.

The company claims the restructuring cost them almost $2 billion. Oracle reduced its global workforce by 21,000 employees - approximately 13% of its staff - during the 2026 fiscal year ending May 31, 2026. The tech giant officially disclosed details of the cuts in its annual financial regulatory filing on Monday, June 22, explicitly stating that AI adoption and automation directly replaced numerous roles.

“The adoption and deployment of AI technologies across our operations have resulted, and may continue to result, in reductions to our workforce,” the report said.

Conversely, multiple reports indicate that the layoffs are mainly a capital reallocation strategy, as Oracle moves into AI infrastructure. According to the filing, the company ended the 2026 fiscal year with 141,000 employees, down from 162,000 at the same period last year.

Oracle claims the restructuring cost it $1.84 billion in severance payments and other related costs, nearly 400% higher than the restructuring bill in the previous financial year. It also said in its filing that the cuts were due to various factors, including management and product changes, performance issues, and broader re-strategizing.

AI Infrastructure Spending

Oracle signed a massive $300 billion, 5-year deal with OpenAI last year, and another with Meta, to provide AI compute power, as the company continues its aggressive expansion into AI cloud infrastructure. Unlike cloud rivals Amazon and Microsoft, which fund AI builds through massive existing cash flows, Oracle is reportedly burning cash and issuing up to $40 billion in new debt and equity to stay competitive. The workforce reductions appear to be another means of funding.

Broader Industry Trend

These cuts are yet another part of a wider worrying trend of tech industry layoffs, attributed to either AI adoption or plans to invest in AI infrastructure. We recently reported Meta’s plans to cut 8,000 jobs to fund AI infrastructure. Tech giants like Amazon, Google, and Microsoft have also announced job cuts to fund AI ambitions.

Counting the Oracle cuts, more than 100,000 US tech workers have lost their jobs this year. Last month alone saw 40,000 AI-related job cuts, even as surveys indicate that executives are unsure of the benefits of AI replacement.

There is also speculation that companies are using AI as an excuse to conduct layoffs for other reasons, a move that OpenAI’s CEO, Sam Altman, terms “AI washing”. Our in-depth analysis breaks down the available stats and facts on this trend.

Ed Zitron is pointing to Oracle as an example of a company that could collapse as a result of the bubble bursting. We could see another 141,000 layoffs. At least Meta might be able to pay its bills using an infinite ad money glitch.

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Etiido Uko is a news contributor for Tom's Hardware covering the latest updates in big tech and the PC industry. He is a mechanical engineer and senior technical writer with over nine years of experience in documentation and reporting. He is deeply passionate about all things engineering and technology, and is an expert in gadgets, manufacturing, robotics, automotive, and aerospace.