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Oracle Cuts Jobs After $19.3 Billion Quarterly Revenue

Oracle initiated a new round of global layoffs from September 14 to 15, coinciding with the company's strong quarterly earnings report showing $19.3 billion in revenue and $4.76 billion in net profit, a year-on-year increase of about 30%. Affected employees reported learning about their layoffs only after being cut off from access to corporate email and internal systems like Slack, as the company did not notify them through personal email.

In the fiscal year ending May 31, 2026, Oracle has cut approximately 21,000 jobs, about 13% of its global workforce, reducing the total number of employees from about 162,000 to approximately 141,000. This includes about 9,000 layoffs in the U.S. and about 12,000 overseas. A previous round of layoffs in March was estimated by TD Cowen to involve 20,000 to 30,000 employees (about 18% of the total workforce), but the company has not officially confirmed specific numbers.

The earnings report indicates that Oracle has increased its restructuring budget for fiscal year 2026 by $700 million to approximately $2.8 billion, primarily for employee severance and related exit costs. The severance package offered is four weeks of basic salary plus one additional week for each year of service, capped at 26 weeks, with some of the laid-off employees having been with the company for over 20 years.

Alongside the layoffs, the company is making significant capital expenditures on AI infrastructure: capital spending for fiscal year 2026 has surged from $21.2 billion in the previous fiscal year to $55.7 billion, resulting in a negative free cash flow of $23.7 billion. Prior to this, Oracle's stock price had dropped about 27% this year. Revenue from cloud infrastructure business achieved triple-digit growth in the latest quarter.

In the previous round of layoffs, Oracle Health (formerly Cerner) saw over 30% of its revenue and health sciences department cut, while significant reductions occurred in the development teams of NetSuite in India and the Philippines. Engineering and sales positions in the cloud infrastructure department were also eliminated, with the customer success department experiencing layoffs exceeding 30%. Security teams, including identity management and cloud security, were also affected.

From a market mechanism perspective, these layoffs are not due to poor performance—net profit increased by about 30% year-on-year, and cloud infrastructure revenue saw triple-digit growth—but rather a typical capital reallocation: the company is redirecting cash flow originally used to maintain existing workforce levels towards the substantial capital expenditures required for building AI data centers. The $55.7 billion capital expenditure for fiscal year 2026 far exceeds the operating cash flow for the same period, forcing the company to balance the negative $23.7 billion free cash flow gap by cutting labor costs and expanding the severance budget. In this process, funds are shifting from traditional job salary expenditures to AI infrastructure construction, benefiting cloud computing and AI-related businesses and their capital expenditure supply chains, while putting pressure on laid-off employees in non-core AI positions such as sales, customer service, and security.

Analysts previously estimated that if over $1 billion in restructuring costs remain unaccounted for in the first nine months of fiscal year 2026, it implies that further layoffs may occur before the fiscal year ends on May 31. The new round of layoffs in September is seen as a realization of this expectation.

Source: Public Information

ABAB AI Insight

Historical Behavior: Oracle has undergone multiple rounds of layoffs from 2025 to 2026—one round in September 2025 involved 101 people in Washington State and over 250 in California; another round in March 2026 was estimated by the market to involve 20,000 to 30,000 people; by the end of fiscal year 2026, the company had a net reduction of about 21,000 jobs, with total employees decreasing from about 162,000 to approximately 141,000, establishing a pattern of continuous workforce contraction over nearly a year.

Capital Path: The company's capital expenditure path is clear—capital spending for fiscal year 2026 surged from $21.2 billion to $55.7 billion, primarily directed towards AI data center construction; at the same time, by increasing the restructuring budget from $2.1 billion to $2.8 billion, the saved labor cost cash flow is redirected towards capital expenditures, forming a "layoff saves cash—cash invested in AI infrastructure" funding loop, while free cash flow remains negative at $23.7 billion, indicating that this shift has not yet achieved self-sustainability.

Analogy + Industry Position: This resembles the capital reallocation logic of traditional manufacturing industries where "equipment replaces labor"; however, here the "equipment" is replaced by AI data centers and cloud infrastructure. In terms of industry position, Oracle is at a critical transitional window from a traditional enterprise software vendor to an AI cloud infrastructure provider, with its cloud infrastructure revenue showing triple-digit growth indicating initial success in the transition, but it has not yet covered the capital expenditure gap incurred during the same period.

Structural Judgment: The core structural characteristic of this event is [capital concentration]—the company is concentrating limited cash flow from dispersed labor salary expenditures into a single strategic direction of AI data center investment, with cash released from layoffs and increased restructuring budget jointly serving this centralized capital allocation, rather than being caused by industry-wide technological replacement or regulatory changes.

ABAB News · Cognitive Law

  1. The brighter the earnings report, the more justified the layoffs.

  2. The saved salaries become data centers.

  3. Above the growth curve, there are erased jobs.