What Is Oracle? A Software Giant Cuts Tens of Thousands of Jobs Amid Surging AI Investment

TradingKey - Software giant Oracle ( ORCL) is initiating a new round of massive layoffs, potentially affecting tens of thousands of employees, at a critical juncture as the company bets heavily on AI infrastructure.

As a leading global provider of enterprise software services, Oracle has long held a dominant position in the database sector, built on decades of technological expertise. However, with the rapid development of generative AI, Oracle's legacy business is facing unprecedented challenges while also encountering new opportunities for transformation.

In recent years, Oracle has continuously ramped up its investment in cloud computing and AI, aiming to gain a competitive edge in this technological revolution.

What is Oracle?

Founded in 1977, Oracle is a premier global provider of enterprise software services, headquartered in Austin, Texas. The company was founded by Larry Ellison, who currently serves as Chairman and Chief Technology Officer (CTO), with Clay Magouyrk and Mike Sicilia serving as Chief Executive Officers (CEOs).

As the world's largest database software vendor, Oracle focuses on providing a full range of enterprise solutions, maintaining industry dominance across four major sectors: Database Management Systems (DBMS), Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and cloud computing services. Its products and services are widely used across core global industries including finance, telecommunications, and manufacturing, providing digital support for leading enterprises in various fields.

The History of Oracle Corporation

In 1977, Larry Ellison, Bob Miner, and Ed Oates founded Software Development Laboratories (SDL) with $2,000 in seed capital; the company's core technology was inspired by the relational database theory proposed by IBM researcher Edgar F. Codd.

In 1979, the laboratory launched the first commercial Oracle database (Version 2), winning a contract from the CIA due to its full implementation of the SQL language, and officially changed its name to Relational Software Inc. (RSI) that same year.

In 1982, the company established "Oracle" as its brand name and went public on NASDAQ in 1986; by 1987, revenue had exceeded $100 million, making it the world's fourth-largest software company.

Entering the 1990s, Oracle launched a development model driven by both global expansion and acquisitions. Between the 1980s and 1990s, the company expanded its operations to markets including Canada, Europe, and Japan, entering the Chinese market in 1989 to gradually build a global sales and service network.

To strengthen its core business, the company refined its industry landscape through a series of key acquisitions. It acquired PeopleSoft in 2005, significantly boosting its competitiveness in the enterprise ERP software sector. In 2009, it acquired Sun Microsystems for $7.4 billion, gaining the Java technology ecosystem and server hardware R&D capabilities. The 2013 acquisition of Acme Packet further enhanced its cloud infrastructure layout. With these moves, Oracle surpassed IBM in 2013 to become the world's second-largest software company and transferred its listing to the New York Stock Exchange that same year.

In 2020, Oracle moved its headquarters from Redwood Shores, California, to Austin, Texas, fully accelerating its cloud transformation. It launched core products such as Oracle Cloud Infrastructure (OCI) and Autonomous Database, deeply transitioning into the role of an enterprise cloud service provider.

Following the rise of the AI wave, the company quickly established its computing power infrastructure, announcing a $6.5 billion investment in 2024 to build a cloud data center region in Malaysia. In 2025, it entered into deep partnerships with OpenAI and NVIDIA, becoming a core computing power supplier supporting the training of large-scale AI models.

In the first quarter of fiscal year 2026, the company's Remaining Performance Obligations (RPO) reached $455 billion, a year-over-year increase of 359%, with 94.6% of orders coming from AI computing services. The company's market capitalization also briefly surpassed $920 billion, completing its transformation from a traditional software giant to a core provider of AI infrastructure.

Oracle's Key Services and Revenue Sources

Cloud Services

As the fastest-growing core business, Oracle Cloud and Oracle Cloud Infrastructure (OCI) provide full-stack cloud solutions from IaaS (Infrastructure as a Service) and PaaS (Platform as a Service) to SaaS (Software as a Service), covering the entire process of enterprise digital transformation requirements. Leveraging its high-performance AI computing capabilities, OCI has secured major orders from leading clients such as OpenAI and NVIDIA, with revenue for the third quarter of fiscal 2026 growing 84% year-over-year to $4.9 billion.

Databases and Middleware

As the foundation of Oracle's business, Oracle Database has become the global benchmark for enterprise-level databases with its high performance and reliability. The company is also integrating AI technology into its databases, launching Oracle AI Database which supports direct calls to large language models; additionally, Oracle owns the Java programming language ecosystem and development tools like GraalVM, providing enterprises with comprehensive technical support from data storage to application development.

Enterprise Application Software

Covering all enterprise operational scenarios, this segment includes cloud-native ERP solutions such as Fusion Cloud ERP and NetSuite, as well as customer relationship management systems like Siebel CRM, helping companies achieve integrated control across finance, supply chain, and customer management. SaaS revenue for the third quarter of fiscal 2026 reached $4.026 billion.

Hardware and Professional Services

Providing high-performance hardware products such as Exadata Database Machines, paired with professional services like consulting and technical support, providing full-process assurance for enterprise system deployment and maintenance.

What is Oracle Cloud?

As a leading global cloud service provider, Oracle Cloud has overcome the limitations of traditional IT architectures, bringing unprecedented agility, scalability, and innovation to enterprises. Its comprehensive service suite covers Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS), meeting the diverse business requirements of organizations across various scales and industries.

Oracle Cloud Infrastructure (OCI) provides enterprises with the core components required to build robust and scalable IT infrastructure, including services for computing, storage, networking, and databases.

Enterprises can flexibly select virtual machines, bare metal servers, or container services based on their actual needs to rapidly deploy and manage virtualized computing resources while minimizing the maintenance costs and complexity of physical hardware. OCI's high-performance computing capabilities allow enterprises to handle massive datasets and complex workloads, while its globally distributed data centers ensure high availability and low latency.

Oracle Cloud Platform (PaaS) provides developers with a robust and collaborative environment, supporting the creation, deployment, and management of applications using multiple languages and frameworks such as Java and Node.js.

By integrating DevOps tools and microservices architecture, PaaS enables development teams to focus on core business logic without managing the underlying infrastructure. Furthermore, PaaS offers a rich array of database services, middleware, and analytics tools to help enterprises quickly build innovative applications and drive business growth.

Oracle Cloud Applications (SaaS) encompass a range of mature enterprise-grade software applications, including Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and Supply Chain Management (SCM).

These applications are hosted in the cloud, allowing enterprises to access them via the internet without complex installation or maintenance. SaaS helps enterprises automate and optimize business processes, improving operational efficiency and decision-making capabilities. For example, Oracle ERP Cloud integrates finance, human resources, and supply chain management into a unified platform, while Oracle CRM Cloud helps organizations better understand customer needs and enhance satisfaction.

Leveraging the underlying technical expertise of Oracle Database and Exadata hardware, Oracle Cloud has built technological barriers centered on high performance, reliability, and security. It reliably supports mission-critical workloads, ensures the integrity and security of core data, and integrates advanced intelligent analytics and AI capabilities, enabling enterprises to derive deeper value from their data and drive innovation through intelligent decision-making.

As digital transformation deepens, Oracle Cloud continues to iterate its technical architecture. Its latest Autonomous Database service provides full automation for database scaling, performance optimization, and security management, significantly reducing operational costs and labor requirements for enterprises.

In addition, it offers native multi-cloud management capabilities, helping enterprises break through cross-platform resource barriers. This enables unified resource scheduling and business synergy across multi-cloud environments, effectively implementing enterprise-level multi-cloud strategies.

How is Oracle's stock price performing?

In 2025, Oracle experienced a breakthrough moment in the AI infrastructure space through deep collaborations with OpenAI and NVIDIA, with its stock price hitting an all-time high of $344 in September.

However, this seemingly perfect AI windfall quickly evolved into a crisis of confidence in the capital markets due to an industry-shaking supercomputing contract.

This contract, hailed as one of the largest orders in the history of cloud computing, totaled $300 billion over a five-year term; it required Oracle to reserve 4.5 gigawatts of power (nearly the capacity of seven large nuclear power plants), deploy approximately 500,000 high-end AI acceleration cards, and assume responsibility for price reductions if computing performance targets were not met.

Following the initial announcement, the narrative of "securing AI revenue for the next five years" fueled market euphoria, directly propelling Oracle's stock price to a record high.

However, a fatal flaw in this long-term contract soon emerged: revenue recognition would not begin until 2027, while hundreds of billions in capital expenditures were required immediately; this severe timing mismatch forced the market to confront the harsh reality of "future revenue versus current spending."

In the second half of 2025, Oracle's stock price underwent a sharp reversal from its peak, plunging from a high of $344 in September to between $176 and $177 by December, representing a cumulative decline of approximately 48%.

Entering 2026, the downward trend in Oracle's stock price persisted, with shares closing at $146.38 as of April 2.

Against this backdrop, large-scale layoffs became a pragmatic choice for Oracle to alleviate short-term pressure; by cutting non-core positions, the company can quickly free up cash flow to fund AI infrastructure development while reducing its reliance on debt financing.

Oracle's Layoffs Are a Choice Made Under Pressure

On March 31 local time, Oracle sent a mass email to its global workforce, officially launching a new round of large-scale layoffs; according to multiple reports, the move will affect 30,000 employees across various business units.

Several employees disclosed on social media that the layoff notices were blunt: "After carefully evaluating Oracle's current business needs, we have decided to eliminate your position as part of an overall organizational restructuring." This move is a cost-optimization measure Oracle was forced to adopt to manage the capital pressure of building AI infrastructure.

To drive AI infrastructure development, Oracle’s capital expenditure for fiscal 2026 is projected to reach $50 billion, a significant 40% increase from the $25 billion in the previous fiscal year, with the vast majority of funds earmarked for server and network equipment procurement.

To this end, Oracle announced in January 2026 that it plans to raise approximately $50 billion through a combination of debt and equity financing, specifically for data center capacity expansion to support computing power supply contracts with major clients like OpenAI and Nvidia.

This massive investment has already begun to erode the company's cash flow. Data shows that Oracle's free cash flow turned negative from approximately $11.8 billion in 2024 and is expected to reach -$23 billion by 2026.

This is not the first time Oracle has used layoffs to optimize costs. In September 2025, Oracle disclosed its largest restructuring plan in history, which is expected to incur up to $1.6 billion in restructuring charges for the fiscal year ending May 2026, far exceeding any previous similar initiatives.

Oracle's layoffs reflect a common dilemma across the technology industry regarding the scale of investment required for AI infrastructure.

According to data from tech layoff tracker Layoffs.fyi, more than 70 tech companies have laid off approximately 40,480 employees so far in 2026. Industry giants such as Amazon ( AMZN ), Meta ( META ), Microsoft ( MSFT ), Intel ( INTC) and other giants have joined the wave of layoffs; "investing heavily in AI infrastructure while cutting jobs to reduce costs and increase efficiency" is becoming a new normal in the tech industry.

Conclusion

At a critical juncture where AI technology is reshaping the global industrial landscape, Oracle is seeking to gain a competitive edge in this technological revolution by scaling back non-core businesses and concentrating its resources on AI infrastructure.

While facing short-term challenges such as share price declines and cash flow pressures, Oracle is positioned to secure a significant foothold in the AI infrastructure sector over the long term, leveraging its profound technological expertise, broad enterprise customer base, and deep-seated partnerships with AI giants like OpenAI.