Sun losses mount; to cut 4,400 jobs
- By John K. Waters
In an effort to bring its expenses in line with declining sales and
significant deficits, Sun Microsystems executives last week outlined plans to
slash its workforce by 11%, or 4,400 workers. The Santa Clara, Calif.-based
computer maker currently employs 39,400 workers.
Late last week, Sun said losses for the quarter ended Sept. 29 totaled $111
million, or 4 cents per share, vs. a loss of $180 million, or 6 cents per share,
in the same period last year. A year earlier, Sun reported a pro forma loss of
$158 million, or 5 cents per share. Analysts were expecting a loss of 4 cents
per share on sales of $2.87 billion, according to a survey by Thomson First
Even though Sun posted fiscal Q1 numbers that beat Wall Street expectations,
executives conceded that the hoped for rebound in corporate technology spending
never materialized during the third quarter.
Sun has been slow to cut jobs, even in a down economy. Sun CEO Scott McNealy
has said that he was reluctant to lay off his employees because it is so
difficult to replace them when the economy bounces back. With no rebound in
sight, the Sun layoffs were widely seen as inevitable.
''Sun has done an outstanding job in maintaining fiscal discipline, but it
hasn't been enough to counterbalance revenue shortfalls caused by the protracted
economic downturn,'' Steve McGowan, Sun's chief financial officer, told
John K. Waters is a freelance writer based in Silicon Valley. He can be reached