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Sun to lay off 6,000 workers

Sun to lay off 6,000 workers

Sun Microsystems is hoping that by laying off around 18 percent of its workforce it can return to profitability.

The slowing global economy has claimed another tech victim with the news that industry giant Sun Microsystems is to lay off around 6,000 employees – around 18 percent of its total staff.

According to BetaNews, the news comes as the company – best known these days for being the 'big corporate' behind open-source giants MySQL and StarOffice, the commercial version of perennial favourite OpenOffice.org – looks to save around $800 million annually in staffing costs in order to stem its massive losses due to diminishing hardware sales worldwide.

CEO Jonathan Schwartz claims that the move represents “decisive action to align Sun's business with global economic realities and accelerate our delivery of key open source platform innovations – from MySQL to Sun's latest Open Storage offerings.” Schwartz also stated that he expects the company to take a hit of around $450 million this year in costs related to the lay-offs.

The shake-up isn't just occurring at ground level, either: the executive vice president of Sun's software division, Rich Green, announced his resignation as the company re-organises the division into new groups. The groups include the Application Platform group tasked with keeping Sun's Java technology ticking along while ensuring MySQL stays afloat, the Systems Platforms group which will be working with storage and networking software platforms, and the Cloud Computing division which will handle StarOffice and Network.com.

While the good news is that Sun's software investments should remain unaffected by the lay-offs and reorganisation, some are seeing the move as an attempt by the company to ready itself for a future spin-off and sell-off of certain divisions no longer considered 'core'. Matt Asay at CNet believes the company would do well to “sell its hardware business to a Fujitsu or some other company, so that Sun (and Schwartz) can finish its software revolution.

Do you believe the future holds a smaller privately-owned Sun Microsystems, or will the company be able to come out of this financial dip intact? Share your thoughts over in the forums.

2 Comments

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Flibblebot 17th November 2008, 12:58 Quote
Sun has reinvented itself so many times over the years, this is nothing new for them.

First they started off building big servers and scientific workstations; then they moved into webservers; then thin computing; then blade servers; now software.

They've gone through so many boom/bust cycles, it's unbelievable, but they always manage to survive somehow.

It's a shame if they leave the hardware arena, though - they build some kick-ass hardware in the past, but they just couldn't compete on a price level with Intel, even if they blew Intel away in terms of performance.
kenco_uk 17th November 2008, 13:30 Quote
I thought this was 6000 'The Sun' employees going and I was going to cheer from the rooftops.

Alas, more bad news for the IT sector :(
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