Oracle Raises Restructuring Costs to $2.8 Billion

Oracle said in a regulatory filing on September 11 that its restructuring costs will rise by about $700 million, bringing the expected total for its fiscal 2026 plan to roughly $2.8 billion, as the company cuts jobs while spending billions to build AI data centres (Reuters, 2026).

The increase was disclosed after the end of Oracle's August quarter and reflects what the company called additional actions it expects to take. Most of the expense is tied to severance payments. Oracle's workforce has already contracted by roughly 21,000 employees, or 13 percent, over the past year, leaving about 141,000 staff as of May 31 (Times Now News, 2026).

The job cuts come as Oracle pours money into infrastructure to serve customers including OpenAI. Capital expenditure reached $55.7 billion in fiscal 2026, up roughly 162 percent from the previous year, and the company has guided to $90 billion to $95 billion in gross spending for fiscal 2027, with $20 billion to $25 billion expected to be reimbursed by customers (Openbook Analytics, 2026). Oracle has said it will raise $40 billion through debt and equity to support the build-out.

The cost-cutting runs alongside strong demand signals. Oracle reported remaining performance obligations of $664 billion at the end of its fiscal first quarter, up $209 billion year on year, helped by more than $30 billion in new AI cloud contracts signed during the quarter. Cloud infrastructure revenue grew 121 percent to $7.4 billion, and total cloud revenue rose 62 percent to $11.6 billion (Openbook Analytics, 2026). The company guided full-year fiscal 2027 revenue to at least $90 billion.

Analysts remain split on the trade-off. Morningstar's Luke Yang said Oracle's cash flow profile is unlikely to change soon because it will take years for cloud revenue to reach a scale that supports continuous capacity expansion while generating positive cash flow. Evercore analysts described the results as a solid step forward in balancing the investor discussion around accelerating revenue growth, though they acknowledged the debt load is a valid concern (Reuters, 2026). Oracle's shares fell about 23 percent this year through Friday's close, compared with a nearly 12 percent rise in the S&P 500.