Sun Microsystems sheds up to 6,000 jobs

 

NEW YORK: Sun Microsystems Inc announced yesterday it was cutting up to 6,000 jobs as the global economic crisis drives down demand for its computer servers.

Sun said it was cutting 15 to 18 percent of its global workforce, or 5,000 to 6,000 jobs, to “align its cost model with the global economic climate.”

A company spokeswoman said the majority of the layoffs, the second round of job cuts at the Santa Clara, California, firm since May, will be in the United States.

The restructuring, which will involve charges of some US$500 million to US$600 million over the next 12 months, should result in savings of some US$700 million to US$800 million a year, Sun said.

Sun also announced the departure of Rich Green, head of its software division, and a reorganisation to allow the company to “accelerate the introduction of compelling open source innovations.”

“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,” Sun chief executive Jonathan Schwartz said in a statement.

The firm, publisher of Java and other software products, said the software division was being reorganised into three business groups: application platform software, systems platforms, and cloud computing and developer platforms.

“Sun’s new organisational alignment is a recognition of the comprehensive role software plays in the company’s growth strategy,” the company said.

The layoffs come two weeks after Sun Microsystems reported a quarterly net loss of US$1.66 billion compared with a net profit of US$89 million during the corresponding period a year earlier.

Schwartz acknowledged at the time that falling demand for high-end computer servers was impacting on the company’s balance sheet.

The job cuts at Sun were the latest bout of bad news for the technology sector and came just two days after Intel Corp, the world’s largest maker of computer chips, cuts its fourth-quarter revenue projections.

Market intelligence firm IDC reported Wednesday that worldwide spending on information technology is expected to grow just 2.6 per cent in 2009 because of the financial crisis, down from its pre-crisis forecast of 5.9 per cent growth. - AFP