Feeds

Wall St. cheers Sun job cuts

4,400 down - 35,000 to go

  • alert
  • submit to reddit

The essential guide to IT transformation

Wall Street is always grateful to hear of job cuts, and Sun's decision to shed 11 per cent of its staff - or 4,400 people - saw its stock rally by almost ten per cent.

The index saw its biggest rise for nine months in July when record unemployment figures were announced.

We've noted the wisdom and foresight of financial analysts here before. We've noted that compared to its rivals, Sun is doing extremely well in the harshest recession the technology industry has ever known. We've also noted that long term investment is needed in work that brings high margins and profits in the future, which is exactly what Sun is doing.

But analysts have a long term problem with the company, and will only be sated by more blood.

"Sun risks becoming the Apple of corporate computing, cool but less relevant," reckons Merrill Lynch analyst Steve Milunovich (via CRN).

Merrill Lynch's previous public recommendations have included eToys, Pets.com and host of other stocks it privately described as "junk," "crap," "dog", "disaster" and "POS", or "piece of shit". Merrill Lynch was fined $100 million for deception under the Martin Act, a New York state consumer fraud law.

NY's Attorney Spitzer argues that the health of the state depends on the credibility and integrity of its capital markets.

Milunovich may be right - if Sun faces a new and unexpected disruptive technology, and can't respond - (he think this is Itanium) - or if enterprise hardware systems and software will very soon become a commodity game where the only thing differentiating these million dollar computers will be their color.

In short, he asks us to believe that the world of new technological innovation has simply stopped turning, and the future belongs only to companies who can amortize what little R&D is needed down to their distribution channels, that employ not people, but robots and felons.

Sun posted a net loss of a mere $78 million, 2.8 per cent of the $2.7 billion worth of income in the quarter.

Best of luck to our many friends at Sun, and other companies where the stupidity and greed of the Wall Street sages takes a human cost. ®

Build a business case: developing custom apps

More from The Register

next story
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Premier League wants to PURGE ALL FOOTIE GIFs from social media
Not paying Murdoch? You're gonna get a right LEGALLING - thanks to automated software
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
Ballmer quits Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.