Oracle Corporation has begun laying off thousands of employees amid falling stock prices and significant capital expenditures on AI infrastructure, according to CNBC.

As reported by Business Insider, the layoffs affect workers globally, though the exact scale remains unclear.

“After a thorough analysis of Oracle's current business needs, we have decided to eliminate your position as part of a broader organizational transformation. Therefore, today is your last working day,” reads excerpts from letters shared with the media.

As of May 2025, Oracle employed approximately 162,000 people. The cuts impacted Oracle Health, Sales, Cloud, Customer Success, and NetSuite divisions.

CNBC emphasized that the company's core business is struggling due to competition from generative AI models. Additionally, investors are concerned about rising debt levels and declining cash flows.

Oracle's stock has dropped 25% since the beginning of the year, a steeper decline than that of other tech giants.

Oracle continues to develop its flagship database for storing and processing corporate information. In recent years, the company has increased spending on data centers that support AI operations, following competitors like Amazon. However, it still lags behind other cloud players in terms of business scale.

Investing in AI and Cost Optimization

To fund its AI projects, Oracle is utilizing borrowed funds. In January, the corporation announced plans to raise $50 billion. However, in its latest report, management stated that no additional borrowing is anticipated in 2026.

In September 2025, the company reported that the volume of unfulfilled contractual obligations (a measure of future revenue) surged by 359% to $455 billion following a $300 billion deal with OpenAI.

Analysts at TD Cowen estimate that cutting 20,000-30,000 employees could boost the company’s free cash flow by $8-10 billion.

Oracle's management is confident that substantial investments in artificial intelligence will pay off over time.

“The demand for AI infrastructure (GPU and CPU) continues to exceed supply. This is directly reflected in our contractual obligations totaling $553 billion,” said CEO Clay Magouyrk.

The Future of Corporate Structure in the AI Era

Weeks after the layoff of 4,000 employees, Block CEO Jack Dorsey presented his vision for the future workplace, where artificial intelligence will replace middle managers.

According to the entrepreneur, AI can track projects, identify issues, allocate tasks, and relay important information faster than humans. Dorsey and leading independent director of Block, Ruolf Bota, confirmed that the company is in the early stages of transitioning to a tech-driven management model.

“We are questioning the fundamental assumption that organizations must be hierarchical and that it is people who should coordinate processes,” the experts noted.

They aim not only to provide each employee with an AI assistant but to radically automate the management structure itself. As a result, the company “will be built like an intelligence or mini-AGI.”

Source: Jack Dorsey's X.

Humans Still Matter

In March, Block rehired some employees who were laid off in February. Dorsey and Bota stated that while AI may play a significant role in the proposed company model, humans will continue to make key business and ethical decisions.

Employees will be redistributed into three roles:

  • individual contributors — who create and maintain operational systems;
  • responsible parties — who solve specific tasks and can utilize any necessary resources;
  • player-coaches — who combine coding and development with managerial duties, including mentoring and supporting colleagues.

Moving Away from Traditional Hierarchies

Most companies are structured hierarchically: information flows from employees to managers, then to executives, and back down.

Dorsey and Bota believe that while this approach has worked effectively in the past, AI can perform the same functions much faster.

“The model of a firm organized as intelligence rather than hierarchy is so significant that it will change the principles of how companies operate in the coming years,” the entrepreneurs stated.

They argue that accelerating the flow of information fosters rapid business development. Hierarchies and middle managers only slow this process.

In March, Chris Marszalek, co-founder and CEO of Crypto.com, reported a 12% staff reduction, citing the implementation of artificial intelligence across all processes as the main reason.