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Print 16 comment(s) - last by TomZ.. on Nov 17 at 11:26 AM

Sun cuts up to 18% of its global workforce

Things aren’t getting any better for many technology companies with the current economy. More and more firms are failing to reach profit goals and are announcing drastic cost saving measures including layoffs and restructuring to get profits back into the black.

The latest company to announce restructuring and layoffs is Sun Microsystems. Sun announced today that it was restructuring its software operations and shedding up to 6,000 employees. The layoffs will cut 15% to 18% of Sun's global workforce and executive departures including Rich Green, the executive vice president of software.

Sun says that the restructuring will result in a charge of $500 million to $600 million over the next year. About $375 million to $450 million of the charge will come in the current fiscal 2009 year. Cost savings will be realized beginning in Q3 of the current fiscal year.

Sun's software organization will split into new business groups including groups for Application Platform Software, Systems Platforms, and Cloud Computing & Developer Platforms. CNET News reports Sun says its focus will be on "boosting open-source momentum and growing new sectors of the market who view technology as a competitive weapon."

Each group gets a new leader with Systems platform led by John Fowler, Cloud Computing led by Dave Douglas, and CMO Anil Gadre running the Application Platform Group.

The layoffs and restructuring comes arte Sun announced a significant 7% drop in revenue for fiscal Q1. Sun posted a net loss of $1.68 billion for the quarter compared to a net profit of $89 million a year ago. The company missed analyst projections of $2.06 billion for the quarter.

Despite the losses, Sun is in a better position than some. Sun says that it has enough cash reserves to weather the poor economy with $3.12 billion in marketable securities and cash on hand.



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:(
By FITCamaro on 11/14/2008 10:52:22 AM , Rating: 2
Sucks. Wonder how many will be from the US.

We just had a layoff at work yesterday of 23 people. Was just due to not having enough work. But everyone was depressed. Both for those laid off, and people wondering if their name will be next. They say its all the layoffs they're doing for now but how long is "for now".

Might be changing jobs soon. I'm not waiting around to get let go.




RE: :(
By The0ne on 11/14/2008 11:00:50 AM , Rating: 3
Our company is still kicking but we have had no orders for the rest of the year since September. Our manufacturing has stopped for 5 months giving us enough time to release a new product. If this wasn't a global meltdown our contract manufacturer would have told us to shove it and all of us here would have been out of work. Manufacturing transitions are costly.

Keep your hopes up and maybe start applying elsewhere just in case? Even with my diverse background experiences (design, test, manufacturing, QA, logistic, training, contract, support) I'm a bit worry myself. Just so many things that have gone bad...and no one/body has had to pay for it yet ><!


RE: :(
By Regs on 11/14/2008 11:07:15 AM , Rating: 2
Just imagine, when one business goes under or restructures, everybody they did business with also gets effected. Sun helped out AMD a lot in the golden days, all two of them.

If I'm not worried about an appending merger, I'm worried about a recession. It's a 5 year cycle that never stops.


RE: :(
By FITCamaro on 11/14/2008 7:26:14 PM , Rating: 2
I have a 2nd interview for a new job already.


RE: :(
By jjunos on 11/14/2008 11:16:45 AM , Rating: 2
I know two guys that were hit by the AMD layoffs. Problem now is, their fighting a ton of people for the same jobs out there. The one guy (who's a pretty decent engineer) hasn't even been able to get an interview for the last 4 months.

I've been looking for a new job for the past month or so, but with these layoffs everywhere, it's a pretty scary proposition to go into a new job.....and potentially be the first to be cut if there is a layoff.


RE: :(
By The0ne on 11/14/2008 11:35:27 AM , Rating: 2
I know how it feels and it's not pretty. I was hit in 2003 and went through several companies that went down one after another. Well, not literally out of business but the layoffs were 50%+. The first company I was hired into after my first layoff laid me off after 6months. But then this was partially my fault as I was one of the key members to transition the whole manufacturing activities to China :(

Just gotta keep trying, a break will eventually come. Also consider small companies as well. What are your expertise if you don't mind me asking? Maybe if something comes up around Southern California I can make a post or something. I'm always willing to help out.


RE: :(
By bhieb on 11/14/2008 12:51:59 PM , Rating: 2
That sucks man, but it is the overpaid fully vested guy that has been there for 10 years, and does the same job as you for 30% more simply due to tenure that should worry. There is a cost involved with "new" employees, but once trained they are usually cheaper than the ones that have been there longer.

Don't get me wrong hopefully said company will take that loyalty into account (or be forced to by a union), but some are just brutal and only concerned with the bottom line.

It's not gonna get any better in the next 8 years with proposed corporate tax increases. Business is business and like it or not they will respond to less $$ the same way an individual would, by saving it and running as lean as possible for as long as possible. You may or may not buy into "trickle down", but it is pretty simple business is not out to loose money so any cost to them will be eventually absorbed by the employees/customers. The same way less $ in the consumers pocket impacts things like eating out and retail spending, less money in business pockets will hit the employees. Why keep paying that guy that spends all day posting to blogs and such... Oh crap forget what I said ... gotta get back to work.

Hope that I'm wrong, and I don't envy Obama's possition as the onion headline read "Black Man Given Worse Job in the Country". Funny but oh so true.

http://www.theonion.com/content/news_briefs/black_...


RE: :(
By Ringold on 11/14/2008 4:06:32 PM , Rating: 2
quote:
Hope that I'm wrong, and I don't envy Obama's possition as the onion headline read "Black Man Given Worse Job in the Country". Funny but oh so true.


Reminds me of that John Adams HBO series, when John Adams received the electoral college vote I think it was. Washington said "I am fairly out and you are fairly in. See which of us will be the happiest!"

quote:
It's not gonna get any better in the next 8 years with proposed corporate tax increases.


The economy should turn by the end of next year, otherwise it'd be a fairly unusual recession, but corporate tax increases would instead keep things from getting as good as they were. Maybe it's easy to forget, but not all that long ago the US economy was essentially at full employment. Any recovery will be tempered by having the second highest corporate tax rates in the world, but it'll still recover.. just 20th century France-style. Why locate an HQ, for example, with hundreds or thousands of high-paying white-collar jobs when they can locate in any other developed country and pay less taxes (except Japan)?

Who knows how that'll end up, though. Charlie Rangel (D-NY) tried to negotiate a broad corporate rate tax cut, but his own party appeared to kill it. Obama's also got decent advisors that would be aware of this. The key will be if the left wing of his party allows it to happen, or if they only allow it to happen in return for some equally-destructive compromise on something else. Good luck to Obama, the easy part for him is over!


RE: :(
By HinderedHindsight on 11/14/2008 10:25:50 PM , Rating: 3
"Who knows how that'll end up, though. Charlie Rangel (D-NY) tried to negotiate a broad corporate rate tax cut, but his own party appeared to kill it. Obama's also got decent advisors that would be aware of this. The key will be if the left wing of his party allows it to happen, or if they only allow it to happen in return for some equally-destructive compromise on something else. Good luck to Obama, the easy part for him is over! "

I can't think of any major corp that has relocated its business HQ due to higher business taxes.

Additionally, European countries (as well as Asian countries) have much stricter regulations governing businesses than in the United States. They call for higher levels of social and environmental responsibility, as well as offering more/better benefits for employees. Several European nations offer double the amount of time off, as well as grant larger paid maternity/paternity leave times. By moving to another country, a company will incur new costs not only to set the company up, but in terms of maintaining compliance with ordinances that the United States simply does not have.

Additionally, citizenship becomes an issue when all your executive staff has citizenship in one country- it's rather hard to simply relocate a headquarters and keep your executive staff intact in order to get a smaller initial business tax.

Another issue is talent, especially with technology companies, they tend to centralize in certain places because they are centers of talent (ie, Silicon Valley and Seattle/Redmond). There would be a tremendous cost in trying to relocate talent.

Long story short, companies will not relocate for a variety of reasons, and they won't just pick up their HQ and take it to another country. There's a reason they keep fighting for lower business taxes in THIS country rather than simply moving- they're trying to eat their cake AND have it too. If a high business tax truly made it that cost prohibitive, they would move instead of trying to get legislation passed. Many companies have done something similar in the trend of outsourcing- they found it much cheaper to send tech support and programming services to other countries where the talent is cheaper. Once companies are convinced that they can outsource their executive talent in the same way, then you MIGHT see some headquarters moving.

Otherwise, this idea of moving HQ's is meaningless.


$1B wasted.
By mxnerd on 11/15/2008 12:59:22 PM , Rating: 2
Sun wasted one billion on purchasing MySQL. I wonder how much revenue does SUN get from MySQL alone, and how much money does SUN make, if any, from MySQL product.

The worst decision ever made.




RE: $1B wasted.
By FITCamaro on 11/15/2008 9:05:06 PM , Rating: 2
I didn't even know Sun bought MySQL.


RE: $1B wasted.
By HinderedHindsight on 11/15/2008 11:13:28 PM , Rating: 2
Sun must have seen some value in MySQL to spend that kind of money on it.

As it turns out, I was recently hired to a company which makes extensive use of MySQL on clustered Solaris servers. There is (to my surprise) a large market for MySQL integration and support contracts, as well as certification training. One would never think that this might be the case, but our company as well as several others lay down hard cash for support. It's more cost effective in many ways than going an Oracle or a MS SQL route.

After my recent experiences dealing directly with Sun and seeing their strategy in investing in open source technology, it seems as if the investment is paying off. I still question the logic of going open source to combat the onslaught of closed source Microsoft products, but it might be their only workable strategy at this point.


RE: $1B wasted.
By TomZ on 11/17/2008 11:26:12 AM , Rating: 2
quote:
Sun must have seen some value in MySQL to spend that kind of money on it.

I doubt it - personally I think Sun is clueless when it comes to the business of software.

For example - Java. Great technology, great innovation, very widely used. But Sun never made any money off of that. The only money they got for Java was the MS payout. They never made any more than a pittance in licensing Java.

Clueless, I think.


Don't lose hope
By Sramana on 11/14/2008 9:11:31 PM , Rating: 2
I hoped the people who are losing their jobs don’t get discouraged. This is a good time to explore being in business yourself.

I want to point you to my new book, Entrepreneur Journeys (Volume One), which many discouraged people are using to get some positive momentum, inspiration, and encouragement, as well as learn the ropes of entrepreneurship if this way of life is new for you.
Check it out: http://www.amazon.com/dp/1439206872

Many great companies have been found during downturns and recessions. Many people have found their way into self-employment during difficult times.

Do not give up hope.

Sramana
www.sramanamitra.com




RE: Don't lose hope
By Oregonian2 on 11/17/2008 12:08:09 AM , Rating: 2
I got hit about a week ago (company HQ move away from here so we're now the "remote site" that got almost entirely removed in a downturn).

Entrepreneurship can be interesting (I once worked for a startup as an early employee), but back then there was investor money to be had. Financial investment sources aren't too plentiful now, I suspect.


RE: Don't lose hope
By highlandsun on 11/17/2008 1:20:15 AM , Rating: 2
I started my company in 1999 as the dot-bombs were imploding. Investors were all running for cover. We succeeded without them. I wouldn't worry too much about getting investors - you're better off owning your business without their meddling.


"Mac OS X is like living in a farmhouse in the country with no locks, and Windows is living in a house with bars on the windows in the bad part of town." -- Charlie Miller

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