Sun lays off approximately 1,000 employees

Sun cites US economy as the reason for its recent troubles, including US$34 million losses in last quarter

Following through on a restructuring plan announced in May, Sun on Thursday laid off approximately 1,000 employees in the United States and Canada.

All told, the company plans to reduce its workforce by approximately 1,500 to 2,500 employees worldwide. Additional reductions will occur in other regions including EMEA (Europe, Middle East Africa), Asia-Pacific, and Latin America. Reducing the number of employees by 2,500 would constitute a loss of about 7 percent of the company's employees.

"Every part of the company's staffing infrastructure was evaluated and reductions were made across all levels, including vice presidents and directors," a Sun representative said Friday morning. The company declined to provide the names of these directors and vice presidents.

Sun has cited the economy as the reason for its recent troubles, which saw the company losing US$34 million in the fiscal quarter that ended March 30.

"We believe the restructuring will result in a more efficient coverage model with resources aligned to growth opportunities as well as more focused and effective demand creation capabilities," the representative said. "Sun remains committed to maintaining a disciplined approach to meeting financial and operational goals for FY09 and beyond."

Sun CEO Jonathan Schwartz in a May blog cited declining US revenue as a problem.

"The lowlight of the quarter was revenue in the US -- which declined year over year by nearly 10 percent, a big step down for a geography that typically contributes 40 percent of our total revenue. The highlight of the quarter was our India performance, up 30 percent year over year -- and our chip multi-threading Niagara systems, which grew (billings)," Schwartz said.

"We'll continue to diversify our business -- geographically, and with the introduction of our Open Storage initiatives this past week and acquisitions like MySQL and Vaau, we'll continue moving into adjacent markets," Schwartz said.

He also addressed the question of whether Sun should abandon its new strategy of giving away its software. Sun will not stop giving it away, according to Schwartz, citing a priority in developer adoption.

Speculation surroundings Sun's troubles has ranged from Fujitsu emerging as a potential suitor for Sun to Schwartz's job being in jeopardy.

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