Sun Microsystems Inc. (JAVA) announced Friday that it was slashing its workforce by up to 6,000 jobs, as the company restructures in the face of a weak economy.
The cost-cutting move is aimed at reducing expenses by about $700-$800 million per year, the company said. Under the plan between 5,000 and 6,000 jobs will be cut, representing about 15% to 18% of its global workforce.
"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," Jonathan Schwartz, Sun's CEO, said in a press release.
The company estimated that the restructuring will lead to charges of $500 to $600 million over the next 12 months. About $375-$450 million of this will come in its current 2009 fiscal year.
Sun predicted that it will begin to start realizing cost savings in the third quarter of fiscal 2009, which ends in March. A substantial portion of the run-rate benefit will likely be seen by the first quarter of the next fiscal year, the company said.
Sun also revealed an alignment of its software organization into new business groups, in a move it says recognizes the comprehensive role software plays in its growth strategy.
The company said it will align the software organization into new business groups - Application Platform Software, Systems Platforms, and Cloud Computing & Developer Platforms.
Sun also announced that Rich Green, its Executive Vice President of Software, has chosen to leave company.
In further management realignment, product and technology marketing will now be integrated directly into the product groups, the company revealed. Field and partner marketing will be moved under Peter Ryan, Executive Vice President of Global Sales and Services.
Ingrid Van Den Hoogen has been appointed Senior Vice President and will lead corporate marketing. Van Den Hoogen also joins Sun's Executive Leadership Team, reporting to the CEO.
About two weeks ago, Sun announced its preliminary first-quarter results, saying it fell to a loss in the three-month period compared to a profit in the same period last year. The company's results were affected by goodwill impairment and restructuring charges as well as the weak U.S. economy.
The Santa Clara, California-based company posted a net loss of $1.677 billion or $2.24 per share, compared to net income of $89 million or $0.10 per share reported in the prior year quarter.
Excluding one-time charges, largely for goodwill impairment, the company lost $65 million, or $0.09 per share, still worse than the $0.08-per-share loss analysts were predicting.
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