Mounting pressure to finance its ambitious artificial intelligence expansion is pushing Oracle toward potentially severe corporate restructuring, according to market analysts. To fund massive infrastructure plans and multi-billion dollar partnerships, including one with OpenAI, the technology giant may need to implement drastic measures. These could range from extensive workforce reductions to the divestiture of major business units, unsettling investors.
Stock and Credit Market Signals Reflect Strain
The financial markets are already reflecting these pressures. Oracle’s share price has dropped nearly 15% over the past month, currently trading at 165.90 euros. This leaves the stock more than 40% below its 52-week high of 280.70 euros.
Concerns are also evident in debt markets. The cost of insuring against an Oracle credit default, measured by Credit Default Swaps, tripled in the latter months of 2025. Furthermore, U.S. banks are reportedly scaling back their financing for Oracle-related data center projects. In a sign of cash flow management, Oracle has begun requiring advance payments of up to 40% from some customers.
Analyst Report Suggests Radical Options
A recent analysis from investment bank TD Cowen has heightened market unease. The report indicates Oracle is evaluating several scenarios to secure capital for its AI data center build-out. One prominent option under consideration is the elimination of 20,000 to 30,000 positions. Market experts estimate such a cut could generate between $8 billion and $10 billion in cash flow.
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However, layoffs may not be the only lever pulled. The Cerner health division, which Oracle acquired for $28.3 billion in June 2022, is also reportedly under review for a potential sale. Early signs of workforce trimming have already emerged; on January 22, over 250 employees in the San Francisco Bay Area, including teams in cloud and AI, were let go. Oracle declined to comment on these reports.
Massive AI Deal Drives Capital Needs
The root of this financial strain is largely attributed to a colossal five-year agreement with OpenAI, valued at $300 billion. TD Cowen calculates that fulfilling this single contract would require approximately $156 billion in investment expenditures and the procurement of roughly 3 million graphics processing units (GPUs).
Legal Challenges Compound Issues
Adding to the company’s challenges, a class action lawsuit was filed by bondholders on January 14. The suit alleges that Oracle failed to adequately disclose the necessary debt requirements for its AI expansion when it issued $18 billion in bonds in September 2025.
Oracle’s management has consistently stated that all major projects remain on schedule. The coming weeks are seen as critical for restoring lender confidence. Whether rumors of a radical corporate overhaul are confirmed will likely become clearer in early March, when Oracle releases its next quarterly results.
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