Oracle raises restructuring cost estimate to $2.8 billion amid AI-driven layoffs

Oracle disclosed on Friday that its fiscal 2026 restructuring program is now expected to cost roughly $2.8 billion, up $700 million from earlier estimates. The charge covers severance, contract terminations and other exit costs and is partly attributed to the company’s rollout of artificial-intelligence tools across various functions.

The technology firm had previously reported eliminating about 21,000 jobs, or 13% of its workforce, during the prior year. Reductions affected research and development, sales and marketing, cloud and services, hardware and administrative areas. The latest estimate suggests the reshaping of staff continues as Oracle invests heavily in AI infrastructure.

Oracle aims to raise $40 billion this fiscal year through debt and equity offerings, including a $20 billion stock sale completed in the first quarter. The company posted a negative free-cash-flow figure of $5.40 billion, better than analysts had forecast. Its backlog grew to $664 billion, with roughly half expected to convert to sales within three years, supported in part by customer prepayments and external chip supplies.

Shares rose as much as 7.8% after the results were released but later fell about 2% by market close, extending a year-to-date decline of roughly 23% that lags the S&P 500’s gain. In a related move, co-founder and executive chairman Larry Ellison cancelled a planned sale of up to 50 million shares valued at about $7.5 billion, citing no specific reason for the decision.

Analysts remain divided on whether Oracle’s expanding AI business will generate sufficient cash flow to fund its capacity expansion and offset concerns about the outlook for its traditional software operations.