Oracle's AI ledger is undergoing two major reductions: a 13% workforce reduction and the founder canceling a plan to sell over $7.5 billion worth of shares.

Oracle's AI ledger is undergoing two major reductions: a 13% workforce reduction and the founder canceling a plan to sell over $7.5 billion worth of shares.

Oracle is trading down labor costs for funding to expand its AI infrastructure, but Wall Street remains skeptical about the returns on this strategy.

On September 14, according to internal emails and statements from three affected employees obtained by Business Insider, Oracle officially launched a new round of layoffs on Monday, with some teams seeing double-digit layoffs.

After the news broke, Oracle's stock price plunged more than 5% at one point that day, before narrowing its losses and closing at $144.72, with a cumulative decline of about 25% year-to-date.

This round of layoffs is a continuation of several rounds of cuts Oracle has implemented this year. Oracle disclosed last Friday that it has expanded its ongoing corporate restructuring plan, allocating an additional $700 million for employee severance pay and layoff expenses to address the financial pressures from its large-scale investment in AI infrastructure.

The scale of layoffs continues to expand, with more than 20,000 employees being laid off in the fiscal year.

According to recent regulatory filings, Oracle’s total number of employees decreased by approximately 21,000 from the same period of the previous fiscal year, representing a decrease of about 13%, in the fiscal year ending May 31, 2026, with a total of approximately 141,000 employees at the end of the period.

On Monday, numerous posts appeared on platforms such as LinkedIn, Reddit, and Blind, with many users claiming to have been affected by this round of layoffs. Previous reports indicated that Oracle had formulated a new round of layoff plans, primarily aimed at reducing salary costs.

Oracle CFO Hilary Maxson previously told analysts that internal "simplification and efficiency improvements" are key measures to control operating costs and protect profit margins.

Behind the cost-cutting measures is Oracle's unprecedented capital bet on AI infrastructure. The company's capital expenditures in the first fiscal quarter reached $28.5 billion, far exceeding the $8.5 billion in the same period last year, and it maintained its capital expenditure forecast of $90 billion to $95 billion for fiscal year 2027.

Hilary Maxson explained in the earnings call that the aforementioned expenditures will be used directly to purchase products from suppliers such as AI racks, cooling systems, and network equipment. To support this expansion, Oracle has raised tens of billions of dollars through massive debt financing.

Wall Street remains skeptical; whether the valuation can be reassessed depends on the conversion of profit margins.

Despite some positive signs in Oracle's latest financial report, Wall Street remains cautious about the prospects for returns on its AI investments.

Morgan Stanley analyst Sanjit Singh maintained a "neutral" rating and a $210 price target for Oracle in his latest report. Morgan Stanley stated that the gross margin and free cash flow conversion of the AI infrastructure business are key variables determining whether Oracle's valuation can shift from "neutral" to "overweight".

Meanwhile, according to a regulatory filing on September 11, Oracle founder Larry Ellison has cancelled a 10b5-1 stock trading plan that was scheduled to be adopted on June 22, 2026.

The plan originally allowed him to sell up to 50 million Oracle shares, worth approximately $7.5 billion, by October 24. Oracle confirmed that Ellison did not sell any shares, but has not yet publicly explained the reason for canceling the plan or disclosed any alternative sales proposals.

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