Oracle (ORCL.US), one of the world’s largest software providers, has launched another round of layoffs affecting thousands of employees. As recently as May 2025, the company employed approximately 162,000 people, and although there has been no official comment from the company, the context behind this decision is abundantly clear. Oracle has been investing heavily for some time in data center infrastructure capable of handling artificial intelligence tasks, and these growing capital expenditures must be financed somehow. According to unconfirmed reports, the layoffs could affect as many as 30,000 employees.
Last September, the company disclosed a contract with OpenAI valued at over $300 billion, which resulted in a sharp increase in unrecognized contract liabilities of as much as 359%, to $455 billion. Shortly thereafter, Oracle also announced changes at the top of its management, appointing new co-CEOs Mike Sicilia and Clay Magouyrk to replace former CEO Safra Catz. The company is clearly undergoing a major internal restructuring, adapting its structure to a new reality in which AI is expected to generate a significant portion of its revenue.
The paradox of the whole situation, however, is striking. Oracle is laying off employees to finance technology that is gradually eliminating those very jobs. This is not an isolated case, but part of a broader trend in the tech industry, where more and more corporations are making similar strategic choices. Investors are relatively optimistic about this transformation, as evidenced by today’s nearly 3% rebound in the company’s stock price. In the long term, however, the market is pricing in the risk of competition in the generative AI space and uncertainty about when massive infrastructure investments will actually translate into future free cash flow. It is precisely this issue that is causing Oracle to trade in its current downtrend.
The company's shares are currently testing the lower boundary of the "value" zone, as measured by the volume profile established since the beginning of 2025. The technical trend remains bearish. Source: xStation
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