Troubled server and storage vendor Sun Microsystems is to cut up to 18 per cent of its workforce to help drive down annual costs by as much as $800m (£536m).
The Silicon Valley firm announced on Friday that between 5,000 and 6,000 jobs, representing 15 to 18 per cent of its global staff, would be lost over the coming months. The company also revealed its software arm would be divided into two new business groups and a new group would also be formed in its Systems organisation.
The vendor claimed it would now be focusing on lucrative open source platforms and hoped the restructure would ultimately offer annual cost savings of between $700m and $800m. Chief executive Jonathan Schwartz said: "Today, we have taken decisive actions 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."
Sun indicated the next 12 months would see it incur charges of between $500m and $600m connected to the plans. Up to $450m of this will be incurred during the current financial year, which runs to the end of June. The company claims it expects to begin making cost savings during Q3 with the full financial benefits being felt during the first quarter of fiscal year 2010.
The latest restructuring plans come at the end of a difficult 2008 for Sun. In May up to 2,500 job cuts were announced after a revenue decline and a net loss of $34m during 2008's third quarter. Things worsened during 2009's first fiscal quarter as revenue declined more than seven per cent year on year and net loss stood at $1.68bn.
Sun's software division will now be divided into two new business groups: Application Platform Software and Cloud Computing & Developer Platforms. The former will be led by erstwhile chief marketing officer Anil Gadre and will focus on open application platforms.
The cloud computing group will be led by Dave Douglas and will work with Sun's online developer community to try and establish the company as a market leader in the cloud space. The systems platform group will be headed by John Fowler and will incorporate the company's Solaris, Virtualisation and Systems Management Software teams.
Sun also announced a couple of changes at the top as Ingrid Van Den Hoogen joins as senior vice president of corporate marketing. Executive vice president of software Rich Green departs after more than two years in the role.
Vendor unveils raft of new specialisations and plans to recruit more resellers 03 Nov 2008
Distributor targets more enterprise businesses 10 Oct 2008Accreditation means that investments are protected 29 Sep 2008Vendor hopes OpenSolaris, MySQL, Lustre and ZFS can breathe life into its stagnant top line 04 Aug 2008
Vendor plans for job cuts as US credit crunch starts to take effect 02 May 2008Vendor rumoured to be in acquisition negotiations with IBM for at least $6.5bn (£4.7bn) 18 Mar 2009
Vendor boosts top and bottom line as analyst iSuppli reveals increased slice of PC and smartphone markets 20 Oct 2009
Revenue tumbles to $2.61bn as Oracle purchase nears 29 Apr 2009
US online specialist ends 2009 strongly, growing business sales in Q4 after nine months of declines 09 Mar 2010
E.ON and ScottishPower receive funding to help complete design and development studies 12 Mar 2010
But the Commission remains confident bloc will exceed target to generate a fifth of energy from renewables by 2020 12 Mar 2010
Industry urges legislators to move bill to the president's desk as quickly as possible 12 Mar 2010
More news
From hydropower hot spots to record-breaking Texan winds, we run down the top stories from the past week 12 Mar 2010
Few debates cast the UK's business and political community in such an unedifying light as the never-ending row over skills.... 12 Mar 2010
Christian Kjaer, chief executive of the European Wind Energy Association, argues that a supergrid is essential to EU efforts to cut carbon emissions 11 Mar 2010 More in-depth
Post your comment
Send an email to the Business Green editor at feedback@businessgreen.com
