Oracle is simultaneously ramping up the largest capital project in its history and preparing to shed roughly a tenth of its workforce. On Monday, the company broke ground on a $16 billion hyperscale data center in Michigan with OpenAI, while internal reports indicate it plans to cut 30,000 jobs by June 15. The dual moves capture a company racing to build physical AI infrastructure even as it slashes operating expenses.
The stock has been volatile in response. Shares surged 9.6% on Monday to close at $241.85, powered by the groundbreaking news and a broader AI rally. But the next day they gave back some gains, settling around $204 in European trading — a 4.4% drop that still leaves the stock up roughly 22% year-to-date and more than 32% over the past 30 days. Trading volume on Tuesday hit 48.4 million shares, more than double the daily average of 21.5 million.
The Barn Rises on Farmland
The Michigan facility, dubbed “The Barn,” occupies 250 acres of former cropland in Saline Township, southwest of Ann Arbor. It will draw 1.4 gigawatts of power — enough to supply one million households — and span 1.65 million square feet. Scheduled for completion in 2027, the project is expected to generate 2,500 union construction jobs, 450 permanent on-site roles, and 1,500 additional regional positions.
The project has not been without controversy. Local opposition triggered lawsuits, thousands of critical public comments, and the resignation of a township treasurer who reported receiving death threats. In response, Oracle and OpenAI pledged $10 million for a community recreation center that the city had already identified as a priority.
Oracle CEO Clay Magouyrk has signaled that the $16 billion initial outlay is just the start. He expects the company to invest an additional $30 billion to $40 billion in internal infrastructure to support the AI buildout.
30,000 Layoffs by Mid-June
Meanwhile, the company is pushing ahead with what would be one of the largest single-year workforce reductions in tech history. After cutting roughly 12,000 positions in India earlier this spring, Oracle now plans to eliminate 30,000 roles globally by June 15. Employees have accused the company of manipulating job classifications to bypass notice periods, adding tension to the cost-cutting drive.
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The contrast between aggressive hiring for the data center and mass layoffs elsewhere has raised questions about Oracle’s strategic priorities. The company argues it is reallocating resources toward cloud and AI, where the backlog has exploded.
A $553 Billion Backlog and Q4 Earnings Loom
Oracle’s third-quarter results showed a cloud infrastructure revenue surge of 84% to $4.9 billion, and total remaining performance obligations hit $553 billion — a 325% year-over-year jump. For the fourth quarter, management has guided for earnings per share of $1.96 to $2.00 and cloud revenue growth between 46% and 50%.
The options market is pricing in a potential 15% swing around the June 10 earnings release. Implied volatility over the next 30 days climbed 7.6 points to 85.49, while the put/call ratio dropped to 0.29, well below the normal 0.39, signaling bullish sentiment among traders. The stock is technically extended, with an RSI of 75, suggesting a near-term consolidation might be healthy.
Analysts remain largely constructive. Out of 44 firms covering Oracle, 34 rate it a “Strong Buy” and one a “Buy,” giving an average score of 1.48 on a five-point scale. The consensus price target stands at $252.19.
All eyes will be on the post-earnings conference call, scheduled for 5:00 p.m. Eastern on Wednesday. Investors will want to hear how the company plans to reconcile a $16 billion-plus infrastructure spending spree with a workforce that is shrinking by the week — and whether that $553 billion backlog is finally translating into cash flow.
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