Oracle's AI ledger makes two simultaneous subtractions: 13% layoffs implemented, founder cancels over $7.5 billion stock selling plan

Oracle is cutting labor costs to allocate more funds for AI infrastructure expansion, but Wall Street still questions the potential returns of this strategy.

On September 14, according to internal emails obtained by Business Insider and statements from three affected employees, Oracle officially launched a new round of layoffs on Monday, with some teams experiencing double-digit percentage cuts.

After the news broke, Oracle's share price plummeted more than 5% at one point that day, later narrowing losses to close at $144.72. Since the beginning of the year, the stock has fallen by about 25% cumulatively.

This round of layoffs is a continuation of several reductions initiated by Oracle this year. Last Friday, Oracle disclosed that it has expanded its ongoing corporate restructuring plan with an additional $700 million for employee severance and layoff expenses, in response to the financial pressure from heavy investment in AI infrastructure.

According to recently filed regulatory documents, in the 2026 fiscal year ending May 31, 2026, Oracle’s total number of employees decreased by about 21,000 compared with the same period last fiscal year, a reduction of approximately 13%, bringing its headcount to around 141,000 by the end of the period.

On Monday, platforms like LinkedIn, Reddit, and Blind saw numerous posts from users claiming to be affected by this round of layoffs. Prior reports indicated that Oracle had planned a new round of job cuts, mainly aimed at reducing salary expenses.

Oracle’s Chief Financial Officer Hilary Maxson previously told analysts that internal “simplification and efficiency improvement measures” are key to controlling operating costs and protecting profit margins.

Behind the labor cost reduction is Oracle’s unprecedented capital bet in the AI infrastructure sector. In the first fiscal quarter, the company’s capital expenditure reached $28.5 billion, far higher than the $8.5 billion in the same period last year, and it is sticking to its forecast of $90–95 billion in capital expenditure for fiscal 2027.

Hilary Maxson explained in the earnings call that these expenditures will go directly to purchasing AI racks, cooling systems, and network equipment from suppliers. To support this expansion, Oracle has raised tens of billions of dollars through large-scale debt financing.

Despite some positive signals in Oracle’s latest earnings report, Wall Street remains cautious about the outlook for returns on its AI investments.

Morgan Stanley analyst Sanjit Singh maintained an “Equal-weight” rating and a $210 target price for Oracle in a recent report. Morgan Stanley stated that the gross margin and free cash flow conversion in the AI infrastructure business are the key factors that will determine whether Oracle’s valuation can shift from “neutral” to “overweight.”

Meanwhile, according to a regulatory filing dated September 11, Oracle founder Larry Ellison has canceled a 10b5-1 stock trading plan adopted on June 22, 2026.

This plan was originally set to allow him to sell up to 50 million Oracle shares, worth about $7.5 billion, before October 24. Oracle confirmed that Ellison has not sold any shares, but the company has not yet publicly provided a reason for the cancellation of the plan or disclosed any alternative sale arrangements.