San Jose (CA) – Sun Microsystems today added itself to a string of bad economic news in what can only be described as a frightening week. Following Intel’s stunning announcement that it would miss its Q4 revenue forecast and could possibly fall back to Q4 2000 sales levels, Sun today announced that it will cut between 5000 and 6000 positions to “align” itself with the current economic climate.

Sun said that a reduction of 5000 to 6000 jobs, which will reduce the headcount to about 27,000 – 28,000 people, will enable the company to save about $700 to $800 million per year. The company estimates that total charges relating to the workforce reduction will be about $500 to $600 million over the next twelve months. Sun expects to begin realizing cost savings in the third quarter of the company's fiscal year 2009.

Sun reported a net loss of $1.7 billion for its fiscal first quarter of 2009, ended September 30, 2008. The company had cash and cash equivalents of about $2.6 billion at the end of the period. Compared to other large IT companies, Sun was among those that suffered the most painful stock declines. In a sample of 23 companies monitored by TG Daily, the company's decline was just behind Nortel and down 83%, compared to its 12 month high, on November 12. Earlier this month, Sun’s market capitalization occasionally dipped below the $3 billion mark in recenbt days. At the time of this writing, Sun’s market cap was about $3.1 billion.    

As part of its restructuring effort, Sun is increasing the focus on its software business, which is highlighted by the company as the asset that differentiates Sun from its competitors. The new software business has two new business groups and now consists of Application Platform Software (open source products including MySQL; software integration services on servers, desktops and handheld devices including Java; Learning Services), Systems Platforms (Solaris, hardware products: computing, storage and networking systems) and Cloud Computing & Developer Platforms (Web-based services, NetBeans, and the StarOffice).

Sun also announced today that executive vice president of software, Rich Green, has left the company.