Just days after

Oracle

(ORCL) - Get Report

reported lowered sales and earnings numbers for its fiscal third quarter, analysts expect the software giant to cut as much as 5% of its work force.

A Wall Street analyst who cited sources "high up in the organization," said the company is looking to cut the bottom 5% of its workers.

"I think what they're looking at is some performance-based reductions, as well as some attrition," said the analyst, who asked not to be named. (The analyst rates Oracle a buy, and the analyst's firm hasn't done underwriting for the company.)

Oracle currently has about 43,000 employees, and a 5% reduction in its workforce would mean 2,150 people would lose their jobs.

When Oracle held its quarterly conference call last week, CEO Larry Ellison indicated the company is always watching costs, including the number of employees it has.

"There isn't an organization out there that's not being asked to do more with less right now," Ellison said. "With the exception of (research and development), Oracle should constantly be reducing headcount in every area."

Other analysts read that as writing on the wall for Oracle's underachievers.

"Basically, on their conference call, they said they were going to lay people off," says Mark Verbeck, an analyst with

Epoch Partners

in San Francisco. "When you say something like that, you have to do it fast. We expect something to happen pretty quickly." (Verbeck's firm doesn't use traditional analyst ratings, and it hasn't done underwriting for Oracle.)

An Oracle spokeswoman declined to comment on the expected layoffs, citing Oracle's policy of not commenting on rumors. However, she referred back to the company's earnings call for the company's position on reductions in its workforce.

Amid a general rally inspired by investors' hopes that the Fed will cut interest rates Tuesday, Oracle shares finished up $1.38, or 9.8%, at $15.44.

On Monday, Web site

F*****Company.com

, which tracks layoffs in the wake of the technology bubble in the stock market, said Oracle sent a memo to senior managers on Friday indicating cutbacks would come Tuesday.

Layoffs at Oracle would come on the heels of major cuts at other tech giants like

Cisco Systems

(CSCO) - Get Report

, which recently announced a

15% cut in its workforce, and

Compaq

(CPQ)

, which said it would let

7% of its workforce go.