A blow to global tech: The cloud computing giant Oracle is dramatically shrinking its workforce. The company recorded a sharp 13% drop in its number of employees during the 2026 fiscal year, a cut that represents a reduction of approximately 21,000 employees from the organization. The move comes against the backdrop of extensive restructuring processes that the company is executing, which are partially driven by the accelerated adoption of artificial intelligence (AI) technologies across all of its business operations.

According to the annual report of the computing giant published this week, the company had 141,000 employees as of May 31, 2026. This is a significant downsizing compared to the corresponding period last year, when the number of employees at Oracle stood at approximately 162,000 people. The report further reveals that the company paid a massive fortune of $1.84 billion for severance pay and other retirement expenses accompanying the restructuring moves in the current fiscal year.

This figure is significantly higher compared to just $374 million spent on this item in the previous fiscal year. Oracle clarified in the report that the adjustments in the workforce stemmed from a variety of factors, including managerial changes and shifts in the company's products, performance issues, strategic transformations, and acquisitions made.

The current cut does not occur in a vacuum, and it is a direct continuation of several reports published earlier this year regarding the layoffs of thousands of employees at Oracle.

The move at Oracle accurately reflects the growing concerns in the market regarding the effects of artificial intelligence on the job market and the shockwave it is creating throughout the entire technology sector. According to data from the website Layoffs.fyi, which tracks layoffs in the industry, no fewer than 196 tech companies have already laid off over 119,800 employees since the beginning of this current year alone.

Although Oracle was considered for a long time a relatively small player in the cloud computing market, in recent months it has made aggressive moves and signed giant deals to establish data centers for the leading companies OpenAI and Meta. The purpose of these deals is to generate real competition against the official leaders of the industry – Amazon and Microsoft.

At the same time, Oracle's financial model presents it with rather complex challenges. Unlike its large competitors that finance their massive investments out of strong cash flows, Oracle is forced to "burn" cash and raise debt to finance its operations. This financial instability is also showing its signs on Wall Street, as the company's stock recorded a decrease of about 10% since the beginning of the year.

Earlier this month, Oracle reported that it expects its net capital expenditures to stand at approximately $70 billion in the current fiscal year. In order to meet the financial burden, the company plans to raise an additional $40 billion through debt and equity, an amount that includes a $20 billion stock issuance that it previously announced.