Feeds

Sun releases Fire 5,000 plan

Trim now, profit later

Security for virtualized datacentres

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. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
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
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
Apple Pay is a tidy payday for Apple with 0.15% cut, sources say
Cupertino slurps 15 cents from every $100 purchase
Forget silly privacy worries - help biometrics firms make MILLIONS
Beancounter reckons dabs-scanning tech is the next big moneypit
Microsoft's Office Delve wants work to be more like being on Facebook
Office Graph, social features for Office 365 going public
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
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.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
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.