Oracle Layoffs: Oracle has spent the past few weeks cutting jobs. Yet its stock has done the opposite of what you’d expect from a company laying off staff- it’s up more than 12% in a matter of days. The
rally is being driven by OpenAI’s newly launched GPT-6 Astra model and a bullish new price target from Morgan Stanley, landing just ahead of Oracle’s earnings report on September 10.
Oracle reduced headcount from about 154,000 to roughly 141,000 during fiscal 2026. Reports say managers were asked to draw up fresh layoff lists in August, with the goal of trimming payroll before the fiscal second quarter began on September 1. Some teams reportedly faced cuts in the double digits by percentage. The September job cuts are happening silently and the company has avoided repeating the ‘6AM mass firing emails’. Instead, the only way people are getting to know about layoffs is from counting the team members on Slack.
The reason for the cuts comes down to cash. Oracle spent $55.7 billion on capital expenditure in fiscal 2026, up from $21.2 billion the year before, and burned through $23.7 billion more cash than it brought in. To cover that gap, Oracle raised $43 billion in debt and $5 billion through stock sales, and expects to raise roughly $40 billion more this year. Cutting staff is one of the few levers Oracle can pull quickly to offset that spending.
How Much The Stock Has Moved
Despite the job cuts, Oracle shares closed at $162.89 on September 8, up 2.36% on the day and marking a fourth straight day of gains. Over the past two weeks, the stock is up more than 14%, and it has climbed roughly 41% since a low point in late July. The rally has stretched into a three-day gain of 12.6% heading into earnings week.
Why Investors Are Looking Past The Layoffs
Two things are driving the rally. First, OpenAI’s launch of GPT-6 Astra has renewed investor confidence in the AI infrastructure buildout that Oracle has bet heavily on. Oracle supplies cloud computing capacity to OpenAI under a $300 billion, five-year deal signed in 2025, and any sign that OpenAI’s models are advancing reinforces the case that Oracle’s data-center spending will eventually pay off.
Second, Morgan Stanley raised its price target on Oracle to $210, implying roughly 30% upside from current levels, while keeping a Neutral rating on the stock. That target added momentum just as investors positioned ahead of Thursday’s earnings.
Oracle reports fiscal first-quarter 2027 results after markets close on September 10. Analysts expect revenue to rise 28% to around $19.1 billion, which would be Oracle’s fastest growth rate since at least 2017, with adjusted profit expected to climb 29% to $1.30 per share.
The bigger number investors are watching is Oracle’s remaining performance obligations, or RPO — its backlog of contracted but not-yet-recognized revenue, which stood at $638 billion after exploding 363% over the past year on the strength of AI contracts with OpenAI, xAI, Meta, Nvidia and others. By Oracle’s own disclosure, only about 12% of that backlog is expected to convert into revenue within the next 12 months, so Thursday’s numbers will offer the clearest sign yet of whether that backlog is turning into real, near-term revenue, or whether the layoffs are simply funding a promise investors are betting on.
