Oracle has been direct about its priorities. In a 10-K filing from June 22, 2026, the company stated: “the adoption and deployment of AI technologies across our operations have resulted, and may continue to result, in reductions to our workforce.” This is how the company is funding its massive, debt-fueled pivot toward AI infrastructure.
During fiscal year 2026, which ended May 31, Oracle cut 21,000 jobs — roughly 13% of its workforce — dropping from 162,000 to 141,000 employees. The company recorded $1.84 billion in severance costs. The reason becomes clear when you look at the capital requirements: Oracle spent $55.7 billion on capital expenditures in fiscal 2026, a 162% increase. That spending pushed free cash flow to negative $23.7 billion. Long-term debt climbed to $122.3 billion.
The centerpiece is the Stargate initiative: a $300 billion contract with OpenAI running from 2027 through 2032. The revenue side looks strong on paper — Q4 posted $19.2 billion in revenue (up 21% year over year), with cloud infrastructure revenue surging 93% to $5.8 billion. But the borrowing has triggered a legal challenge. The Ohio Carpenters’ Pension Plan filed a securities fraud lawsuit alleging that when Oracle offered $18 billion in bonds, the offering documents stated the company “may” need to borrow more — despite allegedly having already planned a $38 billion loan package.
Between June 2 and July 2, 2026, Oracle’s stock fell 42.7%, wiping out roughly $265 billion in market capitalization. Oracle is testing whether aggressive workforce cuts and massive borrowing can bridge the gap between building the infrastructure and earning from it.