Oracle under pressure from more than $100 billion in debt and massive layoffs | Fortune
Oracle is financing a rapid cloud-and-AI build-out with long-dated debt and large-scale severance-driven restructuring, shifting corporate governance priorities toward capital-market dependence and workforce contraction.
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Summary
Oracle entered its fiscal third quarter facing an earnings drop as debt climbed to $108.1 billion and free cash flow turned negative amid surging capital expenditures. The company is using restructuring and long-dated borrowing to fund a strategic shift from enterprise software licensing toward cloud infrastructure and AI data center build-outs. The practical consequence is a business model that depends on sustained capital markets access and continued spending while absorbing large workforce reductions.
Detail
<p>Oracle is preparing to report fiscal third-quarter results as investors focus on workforce reductions, rising debt, and negative free cash flow.</p><p>In the prior quarter, Oracle disclosed a 2026 restructuring plan expected to cost up to $1.6 billion, primarily for employee severance. Oracle has recognized about $826 million in charges, leaving roughly $788 million remaining. Bloomberg reported Oracle was considering layoffs in the thousands as it rebalances its workforce and accelerates its shift toward cloud infrastructure.</p><p>Oracle finished its most recent fiscal year with $92.6 billion in total debt, which increased to $108.1 billion in the first half of the current fiscal year after issuing $18 billion in notes in September 2025 with maturities from 2030 to 2065. Oracle also disclosed $248 billion in future data center lease obligations not yet on its balance sheet.</p><p>Free cash flow turned negative by $394 million as operating cash flow of $20.8 billion was exceeded by capital expenditures of $21.2 billion. Oracle guided capital expenditures of $50 billion this fiscal year and said negative free cash flow is expected to continue.</p>