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.

open source.

Nov 14, 2008 14:05     

after open source , the consultant copanies are the one making all the money. sun is making zero cause you don't need to buy sun hardware to run mysql or java. bad decision! if the companies want open source and free software...they will use linux too, not solaris.
yo report abuse vote down vote up Votes: +4

WHAT'S NEXT!!!

Nov 14, 2008 14:34     

It’s hard to know where this is all headed but the best way to succeed in life as an individual is to identify work you enjoy which enables you to be happy and be with your family anyway. www.LikeSoup.com
Jim Campbell report abuse vote down vote up Votes: -4

Sun is Sinking

Nov 14, 2008 14:36     

I know we have a poor national economy, but think about it, what does Sun sell? They have solaris, but as far as I know, no one uses it. They have Java, but that's free. I do not know of any major market Sun has for its hardware. They have nearly 30,000 employees, so they must make money somehow, but how?
Nik report abuse vote down vote up Votes: -1

So...each fired employee makes ~$133,000? Well well...

Nov 14, 2008 14:45     

So...each fired employee makes ~$133,000? Well well...I should have worked at a newspaper then... just not the SUN
Fred report abuse vote down vote up Votes: -6

RE: open source

Nov 14, 2008 14:58     

I agree with "yo", I don't understand how a company that develops an open source product can thrive unless they are doing some heavy consulting that I am unaware of. Of course, if the average salary of the 6,000 people they are letting go is approx $133,000 (to equal the 800 million), somebody there found a way to make some money.
Nick B. report abuse vote down vote up Votes: +0

Yeah, that's exactly what I was thinking - $133,333...

Nov 14, 2008 15:03     

Yeah, that's exactly what I was thinking - $133,333 per employee. Yahoo Finance, just the other day, had a list of the top paid white collar jobs - the highest average salary being $130,000. I realize benefits such health care add a significant chunk to employee cost, but Sun's employees seemed to be extremely well paid if the provided are correct, which, btw, doesn't seem to include charges relating to the workforce reduction of about $500 to $600 million over the next twelve months.

TJ report abuse vote down vote up Votes: +1

Employee Wages

Nov 14, 2008 15:06     

Actually, each employee probably COST around $133,000 if you include benefits and other such added costs. Probably a lot of laid off engineers...
Gina report abuse vote down vote up Votes: +0

what do they make?

Nov 14, 2008 15:07     

Sun makes more than just Solaris, they have an entire range of enterprise servers and storage solutions.
anon report abuse vote down vote up Votes: +1

Each fired employee saves in ways other than salaries (still really unfortuante0

Nov 14, 2008 15:11     

Hi fred, you have to think in terms of Health insurance, Workers comp insurance, taxes and all other ways their employees them. It's not just salary. These layoffs are heartbreaking. We're going through it at my workplace (4 laid off yesterday) and also my husbands employer (A.M. Castle Metals) is doing massive layoffs today. I'm just watching the news and praying for everyone....
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solaris.

Nov 14, 2008 16:12     

a lot of companies uses solaris. espically if you are running oracle financial application or SAP. no one runs them on Windows or Linux since the software itself cost millions .. The other competitor would be HP unix.
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@Nik

Nov 14, 2008 16:13     

"but as far as I know, no one uses it." then you must be working for small companies too much.
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@Fred

Nov 14, 2008 16:54     

Typically, an employee costs 2-3x what they make when you factor in workers' comp, payroll taxes, power, computer equipment, building costs, etc. So, that means somewhere in the 60k-80k range probably for average salary. That's not that awesome if those are primarily Silicon Valley workers (where an average home is >750k).
Jim L report abuse vote down vote up Votes: +1

Pebble in a pond. Know what I mean?

Nov 15, 2008 09:21     

I heard DHL cut 9000 jobs in Ohio I think. These types of cuts are like a pebble in a pond. The ripple effect will hurt us all in the long run. When you throw a pebble in a pond it affects every living thing there. The waves spread out to the rest. Anyway, you hate to read about so many people getting cut. John Henning Owner: United Franchise Connection http://unitedfranchiseconnection.com .
John report abuse vote down vote up Votes: +0