Oracle may cut up to 30,000 jobs and offload its health tech unit, Cerner, to free up cash for its data centre expansion, according to a research note from investment bank TD Cowen.

If the US cloud giant goes through with the layoffs, it could free between $8 billion and $10 billion in cash flow, money that the firm may need after multiple US banks and equity investors have shown reluctance to finance Oracle-linked data centre projects.

TD Cowen’s research, first reported by CIO, suggests that the tech firm is facing mounting financial strain due to the sheer size of its infrastructure obligations. Even its $300 billion, five-year pact with OpenAI, which initially lifted the cloud firm’s stock by 30%, comes with a whopping $156 billion capex bill, the bank estimates.

However, the research note claims that since the deal with OpenAI was inked, investors have grown wary of Oracle’s growing exposure to risk – the company recently saw major investment partner Blue Owl step away from a $10 billion build in Michigan. 

The company’s aggressive borrowing strategy saw it raise around $58 billion in debt over the last two months to fund data centre builds across the US, while it had previously looked to raise $18 billion through bond sales in September.

TD Cowen said that US banks have since retreated from further financing, with lenders reportedly doubling interest rates for the company’s projects, leading to “multiple Oracle data-centre leases that were under negotiation with private operators [struggling] to secure financing.”

Though Asian banks are still willing to fund Oracle’s expansion outside the US, albeit at premium rates, the firm is reportedly looking at multiple paths to secure its data centre empire. 

Aside from job cuts and divestment, the company has also started requiring new customers to pay a 40% deposit, as well as “bring your own chip” (BYOC) strategies to shift hardware costs back to customers.

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TD Cowen’s report suggests this may not be enough to secure data centre expansion, with previously loyal customers like OpenAI turning elsewhere to meet near-term capacity and private operators holding back on big deals to see how the firm’s financial situation unfolds.

Even as Oracle tries to plot a path through this investment bottleneck, however, its core business remains solid. The company’s latest earnings report shows total revenues up 14%, while cloud infrastructure revenue grew 66% year over year.

This could make the company an attractive proposition for financiers with enough capital and patience to ride out a rough investment cycle and back Oracle’s long‑term infrastructure ambitions. 

Already, evidence points that way, with Bloomberg reporting last week that Blackstone was mulling providing more capital to Oracle to fund its data centre rollout in Michigan, while Bank of America is spearheading an effort to raise debt for the project, starting with a $14 billion target.