Neal, who signed with the Raiders in May, was expected to push second-year pro Oren O'Neal and fourth-year pro Luke Lawton for the starting fullback job. However, Neal became expendable when O'Neal impressed Oakland's coaching staff with his recovery from major knee surgery.
"I'm just preparing for where we need to be as a football team, really, and what we thought we have, and whether that was enough and all that," Raiders coach Tom Cable said of cutting Neal, a 17th-year NFL veteran. "So it was time to go in a different direction there."
O'Neal tore both the anterior cruciate and lateral collateral ligaments in his left knee last year on the opening kickoff of an Aug. 23 preseason game against the Arizona Cardinals. One of the hamstring muscles attached to O'Neal's knee also tore away and had to be surgically reattached.
Then-Raiders coach Lane Kiffin called the injury possibly career-threatening, but after undergoing surgery, O'Neal made remarkable progress during his rehabilitation.
"I think he's really got back out here, got back into it," Cable said of O'Neil. "He gets better and better with each day. In fact, today was probably his best day of catching and blocking and protecting, and just the whole thing. He feels great. Everything's stable."
The Raiders used Neal's old roster spot to sign safety Rashad Baker, who had a team-high-tying three interceptions for Oakland last season before signing with the Philadelphia Eagles this offseason. The Eagles cut Baker earlier this week.
Also, Raiders wide receiver Chaz Schilens underwent surgery on a broken bone in his left foot Wednesday and is expected to miss four to six weeks.
The Associated Press contributed to this report.