Is ChatGPT Responsible For Oracle Layoffs? $300 Billion Cloud Deal Adds Financial Pressure, Stock Falls 54% On Wall Street

US-based tech multi national company Oracle’s mass layoffs have been in headlines for past weeks, and it is still grabbing headlines with employees corning out sharing their ordeal. The recent layoff makes the largest restructuring ever for the company as it is struggling with a massive debt from a landmark $300 billion cloud infrastructure deal with ChatGPT’s parent organsation OpenAI. The company has fired employees across division including Oracle Health, Cloud Infrastructure, Sales, NetSuite, and development centres in India, driven by the urgent need to fund aggressive AI data centre expansion. 

Oracle OpenAI Partnership 

In July 2025, the company formalised one of the largest cloud deals in history with Sam Altman owned OpenAI. In the deal, the OpenAI promises to be spending around $300 billion over time period of five years on Oracle’s cloud services starting in 2027.  

In return, the Oracle promises to build 4.5 gigawatts of AI data centre capacity across the US, equivalent to powering millions of homes. The ambitious project required Oracle to ramp up capital expenditure sharply, pushing the annual capex to around $48 billion, mainly funded via debt. 

The Wall Street Impact 

The company’s share spiked initially to 43 per cent at the time when deal was announced in September 2025 which make the founder of the company, Larry Ellison, the richest person in the world for a brief time. However, the sentiments of investors have been soured. The stock has fallen about 54 per cent on the wall street from its peak amid concerns over increasing debt which has now exceeded to $100 billion and negative free cash flow nearing $25 billion. The media reports suggest that there is a tension between both the partners, consisting of the scrapping of an expansion at the flagship stargate data centre in Abilene, Texas due to shifting chip preferences and financing issues.  

OpenAI has reportedly redirected capacity elsewhere, with social media giant Meta emerging as a potential replacement tenant. 

Oracle Mass Layoff and Severance Cost 

The work force affected from the layoff received abrupt termination e-mails from ‘Oracle Leadership’ as early as 6am IST in India and 3am Pacific Time in the US. The message mentioned “broader organisational change” and “current business needs” without detailed explanation, telling employees to submit personal emails before access was revoked. Some units reportedly saw up to 30 per cent of headcount reduction in a single sweep. The company has attributed part of the restructuring to AI tools enabling leaner product development teams, through analysts estimate the cuts could free up $8-10 billion in cash flow to support the Open AI-backed buildout.  

The media reports claim that the severance costs alone may reach around $1.6 billion this fiscal year. The company is reported to have let go of 12,000 employees from India as part of the layoff.

Also Read: Oracle India Severance Leaked: Social Media Post Unveils Compensation And Package Structure, Employees To Get Six Months Salary And These Perks