United States banks are pulling back from funding Oracle’s expansion of its artificial intelligence data centres, so the business is contemplating laying off 20,000 to 30,000 workers and selling off some of its operations. According to TD Cowen’s research, the elimination of jobs would result in a cash flow release of $8 billion to $10 billion.Cerner, the healthcare software division that Oracle purchased for $28.3 billion in 2022, is also being considered for sale. Several US banks have reduced their lending for data centre projects tied to Oracle, prompting these actions. Equity and debt investors both have expressed concerns about Oracle’s capacity to fund this expansion, according to the article.Layoffs Aligned with Ongoing Financial Challenges of OracleWith a capital investment of $156 billion needed, Oracle’s infrastructure commitments are massive and pose a funding difficulty. Oracle has seen a significant increase in its borrowing rates due to the financial retreat. Since September, the interest rate surcharges charged by lenders to Oracle for funding of data centre projects have nearly doubled. This has resulted in borrowing charges that are often associated with enterprises that are not considered investment grade.Deals have stopped due to the rising prices. Private operators had trouble acquiring funding… Read MoreStartupTalky- Business News, Insights and Stories
