TD Cowen said Oracle could be looking to trim its workforce by about 18% and sell its health tech unit, Cerner.
- Oracle’s debt-fueled data center expansion has drawn concerns, prompting a sharp sell-off in its stock in recent months.
- Last year, Oracle raised its 2026 capital expenditure view by $15 billion to $50 billion and, on Sunday, said it would raise the entire amount through equity and debt.
- Oracle shares have declined about 50% from their September peak.
Oracle, Inc. shares declined 4% in early premarket trading on Monday, amid fresh buzz around layoffs and the company’s newly announced capital raising plan for 2026.
A note from TD Cowen from last week, which claimed the cloud company could be considering workforce cuts as it aggressively builds new data centers, came into focus early Monday.
The Layoffs Scenario
Oracle could cut up to 30,000 jobs and sell health tech unit Cerner to ease its AI datacenter financing challenges, TD Cowen analysts had said, according to a report in tech publication The Register. That would affect 18.5% of Oracle’s total global strength of 162,000 as of May 2025.
The research firm said the retrenchment, if it occurs, would be to improve the company’s financial health amid investor concerns about its debt-fueled data center buildout.
The concerns are primarily driven by Oracle’s $ 300 billion deal to supply cloud infrastructure to OpenAI, announced last September. TD Cowen estimates the OpenAI deal alone will require $156 billion in capital spending for 3 million graphics processing units and other IT equipment, among other items.
This year, "both equity and debt investors have raised questions about Oracle's ability to finance this build-out as demonstrated by widening of Oracle credit default swap (CDS) spreads and pressure on Oracle stock/bonds," TD Cowen said in its note, according to The Register’s report.
It also said that some U.S. banks had pulled back from lending for Oracle-linked data center projects, while private operators leasing to Oracle were struggling to secure financing. Last year, Oracle raised its 2026 capital expenditure by $15 billion to $50 billion, spooking some investors.
2026 Capital Raising Plans
On Sunday, Oracle announced that it would raise $45 billion to $50 billion this year, to build additional capacity to support its customers, including AMD, Meta, NVIDIA, OpenAI, TikTok, and xAI. About $20 billion of that will come from equity and equity-related instruments.
The company, long considered a smaller cloud player in a market dominated by Amazon, Microsoft, and Google, has come under scrutiny over its debt levels and capital plans. Last month, bondholders sued the company for failing to timely disclose its debt plans in connection with the OpenAI deal.
Meanwhile, Oracle stock is under pressure. It declined 15.6% in January, and is down about 50% from its Sept. 10 peak.
If Oracle proceeds with layoffs, it would free up $8 billion to $10 billion in cash flow, TD Cowen said. It did not estimate the gains from the sale of Cerner, which Oracle acquired for $28.3 billion in 2022.
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