Sun to Cut Up to 18 Pct of Workforce

By Geoff Duncan November 14, 2008

Sun to Cut Up to 18 Pct of Workforce

Computer and software maker Sun Microsystems has announced it is shifting its business to align with the global economic climate…and that’s going to mean cutting between 5,000 and 6,000 jobs, some 15 to 18 percent of its workforce. The company is also reorganizing its software division into three business groups and intends to focus on open source—like MySQL and its new Open Storage offering—to grow new market segments.

“Today, we have taken decisive actions to align Sun’s business with global economic realities and accelerate our delivery of key open source platform innovations,” said Sun CEO Jonathan Schwartz, in a statement.

Sun’s sudden shift can’t be seen as anything but a serious move to keep the company afloat, as sales of its high-end enterprise-level servers have all but dried up and the company has watched it stock price plummet, driving Sun’s market value of the company lower than the amount of cash the company actually has on hand…meaning, in the eyes of the financial and investment community, the company effectively has no value. Sun has been struggling with serious financial difficulties for most of the decade, and the trouble have recently been fueling rumors the company might be picked up for a song by a larger computer maker like Dell, Hewlett-Packard, or IBM. Sun posted a loss of $1.7 billion for its latest quarter, after writing down the value of its business by some $1.45 billion.

Ironically, about a dozen years ago, Sun was seriously considering buying Apple.

Sun believes the re-organization and workforce reduction will save the company between $700 and $800 million per year, although it will have to pay $500 to $600 million over the next year in severance and other restructuring costs.

Sun is also saying goodbye to its software chief Rich Green, who has decided to leave the company. Sun said Green “has been an instrumental force in evolving Sun’s software strategy and successful business execution.”

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