Oracle’s ‘Restructuring Is Code for Layoffs,’ Analyst Warns — Can ORCL Stock Keep Rising?

Shares of Oracle ORCL +9.18% ▲ jumped after the company beat fiscal Q3 expectations, with investors cheering the strong results and analysts reaffirming optimism. However, restructuring costs and potential layoffs are drawing attention. RBC Capital analyst Rishi Jaluria highlighted higher restructuring expenses, raising concerns about possible job cuts in the coming months. Looking ahead, analysts rate ORCL as a Strong Buy based on its Q3 performance with an average price target pointing to over 55% upside, though short-term upside may be limited by ongoing restructuring risks.

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For context, Oracle reported Q3 earnings of $1.79 per share, beating the Street estimate of $1.70, with revenue up 22% year-over-year to $17.19 billion, also surpassing expectations.

Oracle Restructuring Sparks Layoff Fears

According to an SEC (Securities and Exchange Commission) filing on Wednesday, following its Q3 earnings report, Oracle has allocated an extra $500 million for restructuring costs. This brings total FY26 funds to $2.1 billion, far higher than in previous years, suggesting thousands of roles could be cut.

Additionally, the company said in its earnings statement that AI coding tools could let it do more with fewer developers, adding that the technology is “enabling us to build more software in less time with fewer people.”

Last week, Bloomberg reported that Oracle is planning to cut thousands of jobs as it manages a cash crunch from its massive AI data center expansion. The planned reductions could affect multiple divisions across the company, reinforcing the link between the increased restructuring fund and the company’s broader cost-management strategy.

RBC Flags Risks but Remains Bullish

Jaluria stated that a company doesn’t expand its restructuring plan by $500 million for the coming quarter without planning job cuts. He added, “Oracle is signaling that restructuring, which is often code for layoffs, could be broader than earlier this fiscal year.”

Nonetheless, Jaluria reiterated his Buy rating on ORCL stock, citing strong growth in results. He noted that sustained share gains will likely depend on disciplined spending, stable margins, and a clear path to free cash flow recovery.

Is ORCL Stock a Buy?

Overall, Wall Street has a Strong Buy consensus rating on ORCL stock, based on 28 Buys and four Holds assigned in the last three months. The average Oracle stock price target of $256.23 implies an upside of 57% from current levels.

Year-to-date, ORCL stock has declined by 16%.

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