Oracle has begun notifying employees of thousands of job cuts as it faces financial pressure tied to heavy investments in artificial intelligence infrastructure.

The company’s stock has fallen about 25% this year, reflecting investor concerns over rising debt, declining cash flow, and competitive risks from generative AI.

Oracle has been spending heavily to expand data centers and AI capabilities, including large contracts such as a major deal with OpenAI.

Analysts estimate that cutting tens of thousands of jobs could significantly boost free cash flow as the company manages its capital commitments, CNBC has reported.

Despite the layoffs, executives say demand for AI infrastructure remains strong and expect long-term benefits from their investments.