Oracle has confirmed that it cut around 21,000 jobs worldwide in fiscal 2026 as part of a major overhaul driven by its increasing focus on artificial intelligence. The company's workforce fell by 13 per cent over the past year, dropping from approximately 162,000 employees to 141,000 as of May 31. Oracle says that wider AI deployment has already resulted in job cuts and may lead to further reductions in the future.

The company's latest annual report reveals that the deployment of AI technologies across its operations has led to workforce reductions and could continue to do so. Oracle attributes the workforce adjustments to various factors, including management and product changes, performance issues, strategic shifts, and acquisitions. This is not the first time Oracle has signalled major changes; in March, it announced plans to cut thousands of jobs as it grappled with a cash crunch caused by its massive AI data centre expansion effort.

Oracle's shift towards AI has been costly, with the company spending $1.84 billion on severance payments and other exit costs related to restructuring activities during fiscal 2026. This is significantly higher than the $374 million spent in the previous fiscal year. The company's strategy puts it in direct competition with industry giants Amazon and Microsoft, both of which dominate the cloud computing market.

Oracle is building huge data centres that can handle AI workloads for customers such as OpenAI, but unlike its competitors, it has had to rely on burning cash and raising debt to finance its ambitions. The company expects net capital expenditure of around $70 billion in the current fiscal year and plans to raise another $40 billion through debt and equity, including a previously announced stock issuance worth $20 billion.

The cost of restructuring is evident in Oracle's financials. The shift towards AI has resulted in job losses, with 21,000 employees let go in the past year alone. This number may not be the last, as Oracle warns that wider AI deployment could lead to further reductions in the future. While automation and AI adoption are driving efficiency gains for companies like Oracle, they also bring uncertainty for workers.

As Oracle continues its transformation into a major player in artificial intelligence and cloud computing, it is clear that the company's focus on AI has come at a significant cost. With $1.84 billion spent on severance payments and exit costs, Oracle's shift towards AI has been marked by job losses and financial strain. The company's reliance on debt to finance its ambitions raises questions about its long-term sustainability in a highly competitive market dominated by Amazon and Microsoft.