Feeds

Sun releases Fire 5,000 plan

Trim now, profit later

Choosing a cloud hosting partner with confidence

Sun Microsystems will fire up to 5,000 workers this year, as the company tries to cut costs and make it easier to post quarterly profits.

All told, Sun expects to cleave off between 11 per cent and 13 per cent of its 37,500 person workforce. The firings mark the first mass layoff to take place under new CEO Jonathan Schwartz. Sun has historically been reluctant to let go of staff, despite Wall Street's constant calls to trim costs via layoffs.

Sun did not specify which internal organizations or regions would be hardest hit by the firings. The need for these cuts, however, can be traced to Sun's $4bn StorageTek acquisition that left the company with a swollen workforce.

Along with the job cuts, Sun plans to reduce its real estate holdings by giving up on its Newark and Sunnyvale sites. Sun will maintain its two, sprawling campuses in Santa Clara, which is a haunted former insane asylum, and Menlo Park, which is where the Sun executives work.

"These initiatives are designed to focus and streamline the company and are expected to result in an annual cost savings between $480m and $590m, with the full impact expected to take effect by Q4 of fiscal 2007," Sun said.

Sun revealed that it expects 2007 full-year revenue growth in the "low-to-middle single digits."

Financial analysts will no doubt hammer Sun in the next couple of days for not making deeper cuts. Some of the firmer Wall Street types have suggested that Sun needs to fire between 10,000 and 15,000 workers to bring its workforce in line with revenue. In addition, analysts will likely suggest that Sun has grown too optimistic about its long-term fortunes.

Schwartz tried to counter such fears, saying that Sun's x86 server business is growing, the deceleration in big-iron sales has "leveled off" and software sales are solid. All of these factors lead management to believe that Sun can grow at a steady, albeit modest, rate over the next couple of years.

Sun's results have been hovering just below the break even mark in recent quarters. Today's cuts should push the company into the black during decent three-month periods. And, when it comes right down to it, this is what management wants.

Posting a small, tidy profit will keep many of the critics quiet as Sun continues to rework its business. ®

The next step in data security

More from The Register

next story
Hey, Scots. Microsoft's Bing thinks you'll vote NO to independence
World's top Google-finding website calls it for the UK
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
OECD lashes out at tax avoiding globocorps' location-flipping antics
You hear that, Amazon, Google, Microsoft et al?
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.
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.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.