Oracle Corp. is weighing drastic measures to stabilize its balance sheet, including whacking up to 30,000 jobs and offloading its healthcare software unit, Cerner, according to a new report from investment bank TD Cowen.
The proposed radical restructuring comes as the company grapples with a tightening credit market and a staggering $156 billion capital expenditure requirement to fuel its artificial intelligence (AI) data center expansion. Analysts warn that U.S. banks have begun pulling back from financing Oracle-linked projects, citing concerns over the company’s ability to fund its massive infrastructure commitments.
The retreat by domestic lenders has sent Oracle’s borrowing costs soaring. Interest rate premiums for data-center project financing have roughly doubled since September, reaching levels typically reserved for non-investment grade companies. This “banking retreat” has already stalled several lease negotiations with private operators, creating a critical bottleneck in Oracle’s cloud rollout.
“Both equity and debt investors have raised questions regarding Oracle’s ability to finance this buildout,” the TD Cowen report claimed. While the company successfully raised $58 billion recently for facilities in Texas, Wisconsin, and New Mexico, that figure represents only a fraction of the total capital needed to maintain its current trajectory.
Oracle said on Sunday it plans to raise $45 billion to $50 billion this year to build additional capacity for its cloud infrastructure through a combination of debt and equity sales, according to a Bloomberg report.
“We believe these fundraising efforts will be received well by investors as they digest it and ultimately shows Oracle is doubling down on its AI efforts,” Wedbush Securities analyst Dan Ives said in a note Monday. He acknowledged growing angst among investors in recent months over Oracle’s ability to meet its datacenter buildouts and $300 billion deal with OpenAI.
To free up an estimated $8 billion to $10 billion in cash flow, Oracle is reportedly considering a workforce reduction of 20,000 to 30,000 employees. This would follow a previous round of 10,000 layoffs in late 2025. Additionally, the company is weighing the sale of Cerner, the healthcare firm it acquired for $28.3 billion in 2022, signaling a potential retreat from its ambitious healthcare-tech pivot.
Oracle is also shifting the financial burden on its customers. Strategies include upfront deposits requiring new clients to pay 40% deposits to fund infrastructure, as well as BYOC (Bring Your Own Chip), in which customers are asked to supply their own hardware to move capital requirements off Oracle’s books.
The financial friction is already impacting Oracle’s blue-chip partnerships. OpenAI, which previously leased significant capacity from Oracle, has reportedly shifted near-term needs to Microsoft and Amazon.
While Asian banks have stepped in to provide international lending at premium rates, industry experts remain divided. Sanchit Vir Gogia, chief analyst at Greyhound Research, described the situation as a “critical warning sign,” advising CIOs to view Oracle contracts as a “shared infrastructure risk.” Conversely, IDC’s Franco Chiam suggested a Cerner sale might simply be a strategic consolidation of core AI services rather than a desperate liquidity move.
