Why Has Oracle Added US$500m to its Restructuring Budget?

Oracle will spend an additional US$500m on restructuring costs in its fiscal year, according to a Securities and Exchanges report filed. 

The company had already announced plans to spend US$1.6bn, bringing the total costs for its restructuring to more than US$2bn 

This budget will cover redundancy packages and further exit costs for employees. It also suggests the company is ramping up its workforce reduction plan. 

Oracle has previously said that AI was reducing its workforce needs at the announcement of its third quarter earnings in March. 

The company said: “AI models for generating computer code have become so efficient that we have been restructuring our product development teams into smaller, more agile and productive groups. 

“This new AI Code Generation technology is enabling us to build more software in less time with fewer people. Oracle is now building more SaaS applications for more industries at a lower cost.”

This follows an increase in job losses from AI, with research from Challenger, Gray & Christmas finding that companies announced more than 54,000 AI-related layoffs in the US during 2025, while a 2025 Acas survey finds that 26% of British employees are concerned about AI job cuts.

Anticipated job cuts amid ‘SaaSpocalypse’

A research report from TD Cowen has suggested that this spend could translate into between 20,000 and 30,000 job cuts, which it believes would free up between US$8bn to US$10bn in cash flow. 

This follows widespread concerns that agentic AI is damaging the business prospects of SaaS companies. 

Many of these businesses are rethinking their operating practices as a result of increased automation – such as Salesforce, which is cutting around 1,000 jobs across its marketing, product and data teams. 

The company previously reduced its headcount by more than 4,000 of its customer support workers in 2025, with CEO Marc Benioff sharing on the Logan Bartlett show: “I was able to rebalance my headcount on my support. I’ve reduced it from 9,000 heads to about 5,000, because I need less heads.

“If we were having this conversation a year ago and you were calling Salesforce, there would be 9,000 people that you would be interacting with globally on our service cloud, and they would be managing, creating, reading, updating, deleting data.”

A shift to AI-first infrastructure

Salesforce is also increasing its use of AI within the SaaS model, with Marc telling investors at the announcement of its fourth quarter earnings: “You’ve heard about the SaaSpocalypse? And it isn’t our first. We’ve had a few of them”. 

He continued: “If there is a SaaSpocalypse, it may be eaten by the Sasquatch because there are a lot of companies using a lot of SaaS because it just got better with agents.”

Oracle is similarly shifting its strategy to increase its focus on AI. 

The company is embedding AI agents directly into its Fusion Applications to manage complex processes, and has committed US$248bn in data centre leases. 

Speaking to investors Tuesday, Oracle Co CEO Mike Sicilia addressed these concerns about AI description, saying: “Some smaller or single-focused SaaS players may well be disrupted. But Oracle will not be among them.”